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|
|
|
ý
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
Ohio
|
|
34-0963169
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
6300 Wilson Mills Road, Mayfield Village, Ohio
|
|
44143
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Large accelerated filer
|
|
ý
|
|
Accelerated filer
|
|
¨
|
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
|
Three Months
|
|
Six Months
|
||||||||||||||||
Periods Ended June 30,
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
||||
(millions—except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net premiums earned
|
$
|
4,513.5
|
|
|
$
|
4,277.0
|
|
|
6
|
|
$
|
8,915.8
|
|
|
$
|
8,456.3
|
|
|
5
|
Investment income
|
99.2
|
|
|
102.2
|
|
|
(3)
|
|
202.5
|
|
|
202.7
|
|
|
0
|
||||
Net realized gains (losses) on securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairment (OTTI) losses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total OTTI losses
|
0
|
|
|
(1.5
|
)
|
|
(100)
|
|
0
|
|
|
(1.7
|
)
|
|
(100)
|
||||
Non-credit losses, net of credit losses recognized on previously recorded non-credit OTTI losses
|
0
|
|
|
(.1
|
)
|
|
(100)
|
|
0
|
|
|
(.1
|
)
|
|
(100)
|
||||
Net impairment losses recognized in earnings
|
0
|
|
|
(1.6
|
)
|
|
(100)
|
|
0
|
|
|
(1.8
|
)
|
|
(100)
|
||||
Net realized gains (losses) on securities
|
40.4
|
|
|
134.5
|
|
|
(70)
|
|
159.8
|
|
|
215.3
|
|
|
(26)
|
||||
Total net realized gains (losses) on securities
|
40.4
|
|
|
132.9
|
|
|
(70)
|
|
159.8
|
|
|
213.5
|
|
|
(25)
|
||||
Fees and other revenues
|
74.4
|
|
|
70.9
|
|
|
5
|
|
147.2
|
|
|
139.3
|
|
|
6
|
||||
Service revenues
|
14.0
|
|
|
10.6
|
|
|
32
|
|
23.8
|
|
|
19.0
|
|
|
25
|
||||
Total revenues
|
4,741.5
|
|
|
4,593.6
|
|
|
3
|
|
9,449.1
|
|
|
9,030.8
|
|
|
5
|
||||
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Losses and loss adjustment expenses
|
3,269.1
|
|
|
3,117.0
|
|
|
5
|
|
6,475.0
|
|
|
6,102.5
|
|
|
6
|
||||
Policy acquisition costs
|
374.8
|
|
|
364.0
|
|
|
3
|
|
743.8
|
|
|
722.9
|
|
|
3
|
||||
Other underwriting expenses
|
611.7
|
|
|
581.1
|
|
|
5
|
|
1,222.1
|
|
|
1,166.7
|
|
|
5
|
||||
Investment expenses
|
6.0
|
|
|
4.4
|
|
|
36
|
|
10.1
|
|
|
9.3
|
|
|
9
|
||||
Service expenses
|
12.9
|
|
|
10.4
|
|
|
24
|
|
22.6
|
|
|
19.0
|
|
|
19
|
||||
Interest expense
|
29.6
|
|
|
30.4
|
|
|
(3)
|
|
56.3
|
|
|
61.0
|
|
|
(8)
|
||||
Total expenses
|
4,304.1
|
|
|
4,107.3
|
|
|
5
|
|
8,529.9
|
|
|
8,081.4
|
|
|
6
|
||||
Net Income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
437.4
|
|
|
486.3
|
|
|
(10)
|
|
919.2
|
|
|
949.4
|
|
|
(3)
|
||||
Provision for income taxes
|
144.0
|
|
|
161.7
|
|
|
(11)
|
|
304.5
|
|
|
316.2
|
|
|
(4)
|
||||
Net income
|
$
|
293.4
|
|
|
$
|
324.6
|
|
|
(10)
|
|
$
|
614.7
|
|
|
$
|
633.2
|
|
|
(3)
|
Other Comprehensive Income (Loss), Net of Tax
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains (losses) on securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
$
|
0
|
|
|
$
|
.1
|
|
|
(100)
|
|
$
|
0
|
|
|
$
|
.3
|
|
|
(100)
|
Other net unrealized gains (losses) on securities
|
88.4
|
|
|
(154.4
|
)
|
|
(157)
|
|
88.3
|
|
|
(55.4
|
)
|
|
(259)
|
||||
Total net unrealized gains (losses) on securities
|
88.4
|
|
|
(154.3
|
)
|
|
(157)
|
|
88.3
|
|
|
(55.1
|
)
|
|
(260)
|
||||
Net unrealized gains on forecasted transactions
|
(1.3
|
)
|
|
(.4
|
)
|
|
225
|
|
(1.6
|
)
|
|
(.7
|
)
|
|
129
|
||||
Foreign currency translation adjustment
|
.5
|
|
|
(.8
|
)
|
|
(163)
|
|
.5
|
|
|
(1.0
|
)
|
|
(150)
|
||||
Other comprehensive income (loss)
|
87.6
|
|
|
(155.5
|
)
|
|
(156)
|
|
87.2
|
|
|
(56.8
|
)
|
|
(254)
|
||||
Comprehensive income
|
$
|
381.0
|
|
|
$
|
169.1
|
|
|
125
|
|
$
|
701.9
|
|
|
$
|
576.4
|
|
|
22
|
Computation of Net Income Per Share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average shares outstanding - Basic
|
591.2
|
|
|
599.5
|
|
|
(1)
|
|
592.6
|
|
|
600.1
|
|
|
(1)
|
||||
Net effect of dilutive stock-based compensation
|
4.3
|
|
|
4.1
|
|
|
5
|
|
4.0
|
|
|
3.9
|
|
|
3
|
||||
Total equivalent shares - Diluted
|
595.5
|
|
|
603.6
|
|
|
(1)
|
|
596.6
|
|
|
604.0
|
|
|
(1)
|
||||
Basic: Net income per share
|
$
|
.50
|
|
|
$
|
.54
|
|
|
(8)
|
|
$
|
1.04
|
|
|
$
|
1.06
|
|
|
(2)
|
Diluted: Net income per share
|
$
|
.49
|
|
|
$
|
.54
|
|
|
(8)
|
|
$
|
1.03
|
|
|
$
|
1.05
|
|
|
(2)
|
Dividends declared per share
1
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
June 30,
|
|
December 31,
2013 |
||||||||
(millions)
|
2014
|
|
|
2013
|
|
|
|||||
Assets
|
|
|
|
|
|
||||||
Investments - Available-for-sale, at fair value:
|
|
|
|
|
|
||||||
Fixed maturities (amortized cost: $12,265.4, $12,824.1, and $13,415.3)
|
$
|
12,498.6
|
|
|
$
|
12,949.4
|
|
|
$
|
13,540.4
|
|
Equity securities:
|
|
|
|
|
|
||||||
Nonredeemable preferred stocks (cost: $497.1, $416.8, and $445.7)
|
760.2
|
|
|
754.4
|
|
|
711.2
|
|
|||
Common equities (cost: $1,265.2, $1,438.2, and $1,451.1)
|
2,381.7
|
|
|
2,224.5
|
|
|
2,530.5
|
|
|||
Short-term investments (amortized cost: $3,118.7, $1,558.1, and $1,272.6)
|
3,118.7
|
|
|
1,558.1
|
|
|
1,272.6
|
|
|||
Total investments
|
18,759.2
|
|
|
17,486.4
|
|
|
18,054.7
|
|
|||
Cash
|
126.1
|
|
|
96.9
|
|
|
75.1
|
|
|||
Accrued investment income
|
82.9
|
|
|
90.4
|
|
|
89.8
|
|
|||
Premiums receivable, net of allowance for doubtful accounts of $133.4, $125.6, and $142.4
|
3,566.3
|
|
|
3,401.9
|
|
|
3,310.7
|
|
|||
Reinsurance recoverables, including $36.2, $35.1, and $44.3 on paid losses and loss adjustment expenses
|
1,135.0
|
|
|
962.2
|
|
|
1,090.2
|
|
|||
Prepaid reinsurance premiums
|
89.8
|
|
|
79.6
|
|
|
74.9
|
|
|||
Deferred acquisition costs
|
479.0
|
|
|
468.1
|
|
|
447.6
|
|
|||
Property and equipment, net of accumulated depreciation of $706.3, $666.0, and $680.4
|
952.5
|
|
|
950.6
|
|
|
960.9
|
|
|||
Net deferred income taxes
|
0
|
|
|
67.9
|
|
|
0
|
|
|||
Other assets
|
261.9
|
|
|
237.8
|
|
|
304.3
|
|
|||
Total assets
|
$
|
25,452.7
|
|
|
$
|
23,841.8
|
|
|
$
|
24,408.2
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||||||
Unearned premiums
|
$
|
5,582.6
|
|
|
$
|
5,323.5
|
|
|
$
|
5,174.5
|
|
Loss and loss adjustment expense reserves
|
8,639.9
|
|
|
8,086.2
|
|
|
8,479.7
|
|
|||
Net deferred income taxes
|
98.8
|
|
|
0
|
|
|
28.4
|
|
|||
Dividends payable
|
0
|
|
|
0
|
|
|
890.2
|
|
|||
Accounts payable, accrued expenses, and other liabilities
|
2,134.2
|
|
|
1,844.3
|
|
|
1,785.0
|
|
|||
Debt
1
|
2,208.0
|
|
|
2,063.9
|
|
|
1,860.9
|
|
|||
Total liabilities
|
18,663.5
|
|
|
17,317.9
|
|
|
18,218.7
|
|
|||
Common Shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 206.1, 197.2, and 201.8)
|
591.5
|
|
|
600.4
|
|
|
595.8
|
|
|||
Paid-in capital
|
1,169.3
|
|
|
1,109.3
|
|
|
1,142.0
|
|
|||
Retained earnings
|
3,989.5
|
|
|
4,000.0
|
|
|
3,500.0
|
|
|||
Accumulated other comprehensive income, net of tax:
|
|
|
|
|
|
||||||
Net non-credit related OTTI losses, adjusted for valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|||
Other net unrealized gains (losses) on securities
|
1,035.3
|
|
|
807.6
|
|
|
947.0
|
|
|||
Total net unrealized gains (losses) on securities
|
1,035.3
|
|
|
807.6
|
|
|
947.0
|
|
|||
Net unrealized gains on forecasted transactions
|
2.5
|
|
|
5.4
|
|
|
4.1
|
|
|||
Foreign currency translation adjustment
|
1.1
|
|
|
1.2
|
|
|
.6
|
|
|||
Total accumulated other comprehensive income
|
1,038.9
|
|
|
814.2
|
|
|
951.7
|
|
|||
Total shareholders’ equity
|
6,789.2
|
|
|
6,523.9
|
|
|
6,189.5
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
25,452.7
|
|
|
$
|
23,841.8
|
|
|
$
|
24,408.2
|
|
Six months ended June 30,
|
2014
|
|
|
2013
|
|
||
(millions)
|
|
|
|
||||
Cash Flows From Operating Activities
|
|
|
|
||||
Net income
|
$
|
614.7
|
|
|
$
|
633.2
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
46.7
|
|
|
49.0
|
|
||
Amortization of fixed-income securities
|
38.1
|
|
|
76.8
|
|
||
Amortization of equity-based compensation
|
29.8
|
|
|
35.1
|
|
||
Net realized (gains) losses on securities
|
(159.8
|
)
|
|
(213.5
|
)
|
||
Net (gains) losses on disposition of property and equipment
|
3.3
|
|
|
2.0
|
|
||
Changes in:
|
|
|
|
||||
Premiums receivable
|
(255.4
|
)
|
|
(218.4
|
)
|
||
Reinsurance recoverables
|
(44.8
|
)
|
|
(61.2
|
)
|
||
Prepaid reinsurance premiums
|
(14.9
|
)
|
|
(13.3
|
)
|
||
Deferred acquisition costs
|
(31.4
|
)
|
|
(33.6
|
)
|
||
Income taxes
|
53.6
|
|
|
43.0
|
|
||
Unearned premiums
|
407.7
|
|
|
393.5
|
|
||
Loss and loss adjustment expense reserves
|
160.1
|
|
|
248.0
|
|
||
Accounts payable, accrued expenses, and other liabilities
|
164.0
|
|
|
168.6
|
|
||
Other, net
|
29.5
|
|
|
28.0
|
|
||
Net cash provided by operating activities
|
1,041.2
|
|
|
1,137.2
|
|
||
Cash Flows From Investing Activities
|
|
|
|
||||
Purchases:
|
|
|
|
||||
Fixed maturities
|
(3,332.1
|
)
|
|
(4,262.6
|
)
|
||
Equity securities
|
(176.7
|
)
|
|
(208.2
|
)
|
||
Sales:
|
|
|
|
||||
Fixed maturities
|
3,329.3
|
|
|
1,872.2
|
|
||
Equity securities
|
446.4
|
|
|
242.1
|
|
||
Maturities, paydowns, calls, and other:
|
|
|
|
||||
Fixed maturities
|
1,117.8
|
|
|
862.1
|
|
||
Equity securities
|
14.2
|
|
|
0
|
|
||
Net sales (purchases) of short-term investments
|
(1,846.0
|
)
|
|
430.6
|
|
||
Net unsettled security transactions
|
174.5
|
|
|
207.9
|
|
||
Purchases of property and equipment
|
(44.7
|
)
|
|
(69.5
|
)
|
||
Sales of property and equipment
|
3.1
|
|
|
1.6
|
|
||
Net cash used in investing activities
|
(314.2
|
)
|
|
(923.8
|
)
|
||
Cash Flows From Financing Activities
|
|
|
|
||||
Tax benefit from vesting of equity-based compensation
|
10.7
|
|
|
7.4
|
|
||
Proceeds from debt issuance
|
344.7
|
|
|
0
|
|
||
Dividends paid to shareholders
1
|
(892.6
|
)
|
|
(175.6
|
)
|
||
Acquisition of treasury shares
|
(140.0
|
)
|
|
(126.7
|
)
|
||
Net cash used in financing activities
|
(677.2
|
)
|
|
(294.9
|
)
|
||
Effect of exchange rate changes on cash
|
1.2
|
|
|
(.7)
|
|
||
Increase (decrease) in cash
|
51.0
|
|
|
(82.2
|
)
|
||
Cash, January 1
|
75.1
|
|
|
179.1
|
|
||
Cash, June 30
|
$
|
126.1
|
|
|
$
|
96.9
|
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Realized Gains
(Losses)
1
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
3,249.0
|
|
|
$
|
43.5
|
|
|
$
|
(3.1
|
)
|
|
$
|
0
|
|
|
$
|
3,289.4
|
|
|
17.5
|
%
|
State and local government obligations
|
2,287.2
|
|
|
46.5
|
|
|
(2.6
|
)
|
|
.1
|
|
|
2,331.2
|
|
|
12.4
|
|
|||||
Foreign government obligations
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
Corporate debt securities
|
2,215.4
|
|
|
47.9
|
|
|
(2.8
|
)
|
|
2.3
|
|
|
2,262.8
|
|
|
12.1
|
|
|||||
Residential mortgage-backed securities
|
1,312.0
|
|
|
32.7
|
|
|
(9.3
|
)
|
|
0
|
|
|
1,335.4
|
|
|
7.1
|
|
|||||
Commercial mortgage-backed securities
|
1,974.4
|
|
|
47.8
|
|
|
(2.9
|
)
|
|
0
|
|
|
2,019.3
|
|
|
10.8
|
|
|||||
Other asset-backed securities
|
965.4
|
|
|
7.1
|
|
|
(.1
|
)
|
|
.6
|
|
|
973.0
|
|
|
5.2
|
|
|||||
Redeemable preferred stocks
|
262.0
|
|
|
31.5
|
|
|
(6.0
|
)
|
|
0
|
|
|
287.5
|
|
|
1.5
|
|
|||||
Total fixed maturities
|
12,265.4
|
|
|
257.0
|
|
|
(26.8
|
)
|
|
3.0
|
|
|
12,498.6
|
|
|
66.6
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
497.1
|
|
|
247.5
|
|
|
(1.4
|
)
|
|
17.0
|
|
|
760.2
|
|
|
4.1
|
|
|||||
Common equities
|
1,265.2
|
|
|
1,118.9
|
|
|
(2.4
|
)
|
|
0
|
|
|
2,381.7
|
|
|
12.7
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other short-term investments
|
3,118.7
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3,118.7
|
|
|
16.6
|
|
|||||
Total portfolio
2,3
|
$
|
17,146.4
|
|
|
$
|
1,623.4
|
|
|
$
|
(30.6
|
)
|
|
$
|
20.0
|
|
|
$
|
18,759.2
|
|
|
100.0
|
%
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Realized Gains
(Losses)
1
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
3,362.8
|
|
|
$
|
63.0
|
|
|
$
|
(15.0
|
)
|
|
$
|
0
|
|
|
$
|
3,410.8
|
|
|
19.5
|
%
|
State and local government obligations
|
2,010.6
|
|
|
27.7
|
|
|
(18.4
|
)
|
|
0
|
|
|
2,019.9
|
|
|
11.6
|
|
|||||
Foreign government obligations
|
16.4
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
16.4
|
|
|
.1
|
|
|||||
Corporate debt securities
|
3,048.8
|
|
|
57.0
|
|
|
(33.0
|
)
|
|
(.8
|
)
|
|
3,072.0
|
|
|
17.6
|
|
|||||
Residential mortgage-backed securities
|
870.9
|
|
|
30.5
|
|
|
(14.7
|
)
|
|
0
|
|
|
886.7
|
|
|
5.1
|
|
|||||
Commercial mortgage-backed securities
|
2,213.9
|
|
|
48.9
|
|
|
(41.0
|
)
|
|
0
|
|
|
2,221.8
|
|
|
12.7
|
|
|||||
Other asset-backed securities
|
941.7
|
|
|
7.6
|
|
|
(2.2
|
)
|
|
.6
|
|
|
947.7
|
|
|
5.4
|
|
|||||
Redeemable preferred stocks
|
359.0
|
|
|
27.8
|
|
|
(12.7
|
)
|
|
0
|
|
|
374.1
|
|
|
2.1
|
|
|||||
Total fixed maturities
|
12,824.1
|
|
|
262.5
|
|
|
(137.0
|
)
|
|
(.2
|
)
|
|
12,949.4
|
|
|
74.1
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
416.8
|
|
|
332.1
|
|
|
(1.5
|
)
|
|
7.0
|
|
|
754.4
|
|
|
4.3
|
|
|||||
Common equities
|
1,438.2
|
|
|
794.5
|
|
|
(8.2
|
)
|
|
0
|
|
|
2,224.5
|
|
|
12.7
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other short-term investments
|
1,558.1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,558.1
|
|
|
8.9
|
|
|||||
Total portfolio
2,3
|
$
|
16,237.2
|
|
|
$
|
1,389.1
|
|
|
$
|
(146.7
|
)
|
|
$
|
6.8
|
|
|
$
|
17,486.4
|
|
|
100.0
|
%
|
($ in millions)
|
Cost
|
|
|
Gross
Unrealized Gains
|
|
|
Gross
Unrealized
Losses
|
|
|
Net
Realized Gains
(Losses)
1
|
|
|
Fair
Value
|
|
|
% of
Total Fair
Value
|
|
|||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
U.S. government obligations
|
$
|
3,630.4
|
|
|
$
|
48.4
|
|
|
$
|
(16.6
|
)
|
|
$
|
0
|
|
|
$
|
3,662.2
|
|
|
20.3
|
%
|
State and local government obligations
|
2,247.3
|
|
|
27.1
|
|
|
(18.4
|
)
|
|
0
|
|
|
2,256.0
|
|
|
12.5
|
|
|||||
Foreign government obligations
|
15.6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
15.6
|
|
|
.1
|
|
|||||
Corporate debt securities
|
2,885.0
|
|
|
60.4
|
|
|
(20.4
|
)
|
|
1.6
|
|
|
2,926.6
|
|
|
16.2
|
|
|||||
Residential mortgage-backed securities
|
1,110.1
|
|
|
31.9
|
|
|
(14.1
|
)
|
|
0
|
|
|
1,127.9
|
|
|
6.2
|
|
|||||
Commercial mortgage-backed securities
|
2,154.4
|
|
|
43.9
|
|
|
(37.8
|
)
|
|
0
|
|
|
2,160.5
|
|
|
12.0
|
|
|||||
Other asset-backed securities
|
1,073.0
|
|
|
6.6
|
|
|
(2.1
|
)
|
|
.2
|
|
|
1,077.7
|
|
|
6.0
|
|
|||||
Redeemable preferred stocks
|
299.5
|
|
|
24.1
|
|
|
(9.7
|
)
|
|
0
|
|
|
313.9
|
|
|
1.7
|
|
|||||
Total fixed maturities
|
13,415.3
|
|
|
242.4
|
|
|
(119.1
|
)
|
|
1.8
|
|
|
13,540.4
|
|
|
75.0
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Nonredeemable preferred stocks
|
445.7
|
|
|
258.7
|
|
|
(4.5
|
)
|
|
11.3
|
|
|
711.2
|
|
|
3.9
|
|
|||||
Common equities
|
1,451.1
|
|
|
1,081.8
|
|
|
(2.4
|
)
|
|
0
|
|
|
2,530.5
|
|
|
14.0
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other short-term investments
|
1,272.6
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1,272.6
|
|
|
7.1
|
|
|||||
Total portfolio
2,3
|
$
|
16,584.7
|
|
|
$
|
1,582.9
|
|
|
$
|
(126.0
|
)
|
|
$
|
13.1
|
|
|
$
|
18,054.7
|
|
|
100.0
|
%
|
|
June 30,
|
|
December 31,
2013 |
|
|||||||
(millions)
|
2014
|
|
|
2013
|
|
|
|||||
Fixed maturities:
|
|
|
|
|
|
||||||
State and local government obligations
|
$
|
5.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Corporate debt securities
|
142.0
|
|
|
188.6
|
|
|
164.2
|
|
|||
Residential mortgage-backed securities
|
27.6
|
|
|
0
|
|
|
0
|
|
|||
Other asset-backed securities
|
14.3
|
|
|
16.0
|
|
|
14.8
|
|
|||
Total fixed maturities
|
189.0
|
|
|
204.6
|
|
|
179.0
|
|
|||
Equity securities:
|
|
|
|
|
|
||||||
Nonredeemable preferred stocks
|
66.1
|
|
|
56.0
|
|
|
60.3
|
|
|||
Total hybrid securities
|
$
|
255.1
|
|
|
$
|
260.6
|
|
|
$
|
239.3
|
|
(millions)
|
Cost
|
|
|
Fair Value
|
|
||
Less than one year
|
$
|
1,882.0
|
|
|
$
|
1,920.2
|
|
One to five years
|
7,400.9
|
|
|
7,530.5
|
|
||
Five to ten years
|
2,862.0
|
|
|
2,919.2
|
|
||
Ten years or greater
|
85.4
|
|
|
93.6
|
|
||
Total
1
|
$
|
12,230.3
|
|
|
$
|
12,463.5
|
|
|
Total No. of Sec.
|
|
Total
Fair Value |
|
Gross Unrealized Losses
|
|
Less than 12 Months
|
|
12 Months or Greater
|
||||||||||||||||
($ in millions)
|
No. of Sec.
|
|
Fair
Value |
|
Unrealized Losses
|
|
|
No. of Sec.
|
|
Fair
Value |
|
Unrealized Losses
|
|
||||||||||||
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
12
|
|
$
|
460.0
|
|
$
|
(3.1
|
)
|
1
|
|
$
|
14.9
|
|
$
|
(.1
|
)
|
|
11
|
|
$
|
445.1
|
|
$
|
(3.0
|
)
|
State and local government obligations
|
55
|
|
333.9
|
|
(2.6
|
)
|
22
|
|
52.2
|
|
(.1
|
)
|
|
33
|
|
281.7
|
|
(2.5
|
)
|
||||||
Corporate debt securities
|
15
|
|
265.1
|
|
(2.8
|
)
|
6
|
|
112.2
|
|
(.5
|
)
|
|
9
|
|
152.9
|
|
(2.3
|
)
|
||||||
Residential mortgage-backed securities
|
56
|
|
684.2
|
|
(9.3
|
)
|
17
|
|
263.2
|
|
(1.7
|
)
|
|
39
|
|
421.0
|
|
(7.6
|
)
|
||||||
Commercial mortgage-backed securities
|
23
|
|
256.7
|
|
(2.9
|
)
|
7
|
|
37.1
|
|
(.2
|
)
|
|
16
|
|
219.6
|
|
(2.7
|
)
|
||||||
Other asset-backed securities
|
3
|
|
47.4
|
|
(.1
|
)
|
2
|
|
28.3
|
|
0
|
|
|
1
|
|
19.1
|
|
(.1
|
)
|
||||||
Redeemable preferred stocks
|
3
|
|
93.6
|
|
(6.0
|
)
|
0
|
|
0
|
|
0
|
|
|
3
|
|
93.6
|
|
(6.0
|
)
|
||||||
Total fixed maturities
|
167
|
|
2,140.9
|
|
(26.8
|
)
|
55
|
|
507.9
|
|
(2.6
|
)
|
|
112
|
|
1,633.0
|
|
(24.2
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
4
|
|
121.4
|
|
(1.4
|
)
|
1
|
|
33.7
|
|
(.2
|
)
|
|
3
|
|
87.7
|
|
(1.2
|
)
|
||||||
Common equities
|
14
|
|
50.4
|
|
(2.4
|
)
|
14
|
|
50.4
|
|
(2.4
|
)
|
|
0
|
|
0
|
|
0
|
|
||||||
Total equity securities
|
18
|
|
171.8
|
|
(3.8
|
)
|
15
|
|
84.1
|
|
(2.6
|
)
|
|
3
|
|
87.7
|
|
(1.2
|
)
|
||||||
Total portfolio
|
185
|
|
$
|
2,312.7
|
|
$
|
(30.6
|
)
|
70
|
|
$
|
592.0
|
|
$
|
(5.2
|
)
|
|
115
|
|
$
|
1,720.7
|
|
$
|
(25.4
|
)
|
|
Total No. of Sec.
|
|
Total
Fair Value |
|
Gross Unrealized Losses
|
|
Less than 12 Months
|
|
12 Months or Greater
|
||||||||||||||||
($ in millions)
|
No. of Sec.
|
|
Fair
Value |
|
Unrealized Losses
|
|
|
No. of Sec.
|
|
Fair
Value |
|
Unrealized Losses
|
|
||||||||||||
June 30, 2013
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
19
|
|
$
|
1,035.9
|
|
$
|
(15.0
|
)
|
19
|
|
$
|
1,035.9
|
|
$
|
(15.0
|
)
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
State and local government obligations
|
139
|
|
829.2
|
|
(18.4
|
)
|
132
|
|
803.1
|
|
(18.2
|
)
|
|
7
|
|
26.1
|
|
(.2
|
)
|
||||||
Corporate debt securities
|
73
|
|
1,254.2
|
|
(33.0
|
)
|
73
|
|
1,254.2
|
|
(33.0
|
)
|
|
0
|
|
0
|
|
0
|
|
||||||
Residential mortgage-backed securities
|
60
|
|
627.4
|
|
(14.7
|
)
|
44
|
|
550.0
|
|
(10.8
|
)
|
|
16
|
|
77.4
|
|
(3.9
|
)
|
||||||
Commercial mortgage-backed securities
|
69
|
|
1,001.0
|
|
(41.0
|
)
|
66
|
|
1,001.0
|
|
(41.0
|
)
|
|
3
|
|
0
|
|
0
|
|
||||||
Other asset-backed securities
|
18
|
|
260.8
|
|
(2.2
|
)
|
18
|
|
260.8
|
|
(2.2
|
)
|
|
0
|
|
0
|
|
0
|
|
||||||
Redeemable preferred stocks
|
5
|
|
151.3
|
|
(12.7
|
)
|
1
|
|
31.4
|
|
(.2
|
)
|
|
4
|
|
119.9
|
|
(12.5
|
)
|
||||||
Total fixed maturities
|
383
|
|
5,159.8
|
|
(137.0
|
)
|
353
|
|
4,936.4
|
|
(120.4
|
)
|
|
30
|
|
223.4
|
|
(16.6
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
4
|
|
89.8
|
|
(1.5
|
)
|
4
|
|
89.8
|
|
(1.5
|
)
|
|
0
|
|
0
|
|
0
|
|
||||||
Common equities
|
50
|
|
74.8
|
|
(8.2
|
)
|
40
|
|
66.7
|
|
(5.9
|
)
|
|
10
|
|
8.1
|
|
(2.3
|
)
|
||||||
Total equity securities
|
54
|
|
164.6
|
|
(9.7
|
)
|
44
|
|
156.5
|
|
(7.4
|
)
|
|
10
|
|
8.1
|
|
(2.3
|
)
|
||||||
Total portfolio
|
437
|
|
$
|
5,324.4
|
|
$
|
(146.7
|
)
|
397
|
|
$
|
5,092.9
|
|
$
|
(127.8
|
)
|
|
40
|
|
$
|
231.5
|
|
$
|
(18.9
|
)
|
|
Total No. of Sec.
|
|
Total
Fair Value |
|
Gross Unrealized Losses
|
|
Less than 12 Months
|
|
12 Months or Greater
|
||||||||||||||||
($ in millions)
|
No. of Sec.
|
|
Fair
Value |
|
Unrealized Losses
|
|
|
No. of Sec.
|
|
Fair
Value |
|
Unrealized Losses
|
|
||||||||||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. government obligations
|
29
|
|
$
|
1,444.3
|
|
$
|
(16.6
|
)
|
28
|
|
$
|
1,434.6
|
|
$
|
(16.3
|
)
|
|
1
|
|
$
|
9.7
|
|
$
|
(.3
|
)
|
State and local government obligations
|
141
|
|
844.2
|
|
(18.4
|
)
|
119
|
|
759.3
|
|
(17.1
|
)
|
|
22
|
|
84.9
|
|
(1.3
|
)
|
||||||
Corporate debt securities
|
51
|
|
997.6
|
|
(20.4
|
)
|
45
|
|
831.1
|
|
(17.8
|
)
|
|
6
|
|
166.5
|
|
(2.6
|
)
|
||||||
Residential mortgage-backed securities
|
66
|
|
763.5
|
|
(14.1
|
)
|
45
|
|
597.6
|
|
(7.9
|
)
|
|
21
|
|
165.9
|
|
(6.2
|
)
|
||||||
Commercial mortgage-backed securities
|
76
|
|
1,061.9
|
|
(37.8
|
)
|
60
|
|
809.2
|
|
(19.7
|
)
|
|
16
|
|
252.7
|
|
(18.1
|
)
|
||||||
Other asset-backed securities
|
25
|
|
287.2
|
|
(2.1
|
)
|
22
|
|
233.3
|
|
(1.8
|
)
|
|
3
|
|
53.9
|
|
(.3
|
)
|
||||||
Redeemable preferred stocks
|
4
|
|
122.7
|
|
(9.7
|
)
|
0
|
|
0
|
|
0
|
|
|
4
|
|
122.7
|
|
(9.7
|
)
|
||||||
Total fixed maturities
|
392
|
|
5,521.4
|
|
(119.1
|
)
|
319
|
|
4,665.1
|
|
(80.6
|
)
|
|
73
|
|
856.3
|
|
(38.5
|
)
|
||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Nonredeemable preferred stocks
|
7
|
|
142.3
|
|
(4.5
|
)
|
7
|
|
142.3
|
|
(4.5
|
)
|
|
0
|
|
0
|
|
0
|
|
||||||
Common equities
|
24
|
|
59.7
|
|
(2.4
|
)
|
20
|
|
58.5
|
|
(2.4
|
)
|
|
4
|
|
1.2
|
|
0
|
|
||||||
Total equity securities
|
31
|
|
202.0
|
|
(6.9
|
)
|
27
|
|
200.8
|
|
(6.9
|
)
|
|
4
|
|
1.2
|
|
0
|
|
||||||
Total portfolio
|
423
|
|
$
|
5,723.4
|
|
$
|
(126.0
|
)
|
346
|
|
$
|
4,865.9
|
|
$
|
(87.5
|
)
|
|
77
|
|
$
|
857.5
|
|
$
|
(38.5
|
)
|
|
June 30,
|
|
December 31,
2013 |
|
|||||||
(millions)
|
2014
|
|
|
2013
|
|
|
|||||
Fixed maturities:
|
|
|
|
|
|
||||||
Residential mortgage-backed securities
|
$
|
(44.1
|
)
|
|
$
|
(44.1
|
)
|
|
$
|
(44.1
|
)
|
Commercial mortgage-backed securities
|
(.6
|
)
|
|
(.9
|
)
|
|
(.9
|
)
|
|||
Total fixed maturities
|
$
|
(44.7
|
)
|
|
$
|
(45.0
|
)
|
|
$
|
(45.0
|
)
|
|
Three Months Ended June 30, 2014
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at March 31, 2014
|
$
|
19.1
|
|
|
$
|
.4
|
|
|
$
|
19.5
|
|
Change in recoveries of future cash flows expected to be collected
1
|
(6.1
|
)
|
|
0
|
|
|
(6.1
|
)
|
|||
Reductions for previously recognized credit impairments written-down to fair value
2
|
0
|
|
|
0
|
|
|
0
|
|
|||
Balance at June 30, 2014
|
$
|
13.0
|
|
|
$
|
.4
|
|
|
$
|
13.4
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended June 30, 2014
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at December 31, 2013
|
$
|
19.2
|
|
|
$
|
.4
|
|
|
$
|
19.6
|
|
Change in recoveries of future cash flows expected to be collected
1
|
(6.2
|
)
|
|
0
|
|
|
(6.2
|
)
|
|||
Reductions for previously recognized credit impairments written-down to fair value
2
|
0
|
|
|
0
|
|
|
0
|
|
|||
Balance at June 30, 2014
|
$
|
13.0
|
|
|
$
|
.4
|
|
|
$
|
13.4
|
|
|
Three Months Ended June 30, 2013
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at March 31, 2013
|
$
|
27.7
|
|
|
$
|
.5
|
|
|
$
|
28.2
|
|
Change in recoveries of future cash flows expected to be collected
1
|
(.6
|
)
|
|
0
|
|
|
(.6
|
)
|
|||
Reductions for previously recognized credit impairments written-down to fair value
2
|
(.2
|
)
|
|
0
|
|
|
(.2
|
)
|
|||
Balance at June 30, 2013
|
$
|
26.9
|
|
|
$
|
.5
|
|
|
$
|
27.4
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended June 30, 2013
|
||||||||||
|
Mortgage-Backed
|
|
|
||||||||
(millions)
|
Residential
|
|
|
Commercial
|
|
|
Total
|
|
|||
Balance at December 31, 2012
|
$
|
27.1
|
|
|
$
|
.6
|
|
|
$
|
27.7
|
|
Change in recoveries of future cash flows expected to be collected
1
|
0
|
|
|
(.1
|
)
|
|
(.1
|
)
|
|||
Reductions for previously recognized credit impairments written-down to fair value
2
|
(.2
|
)
|
|
0
|
|
|
(.2
|
)
|
|||
Balance at June 30, 2013
|
$
|
26.9
|
|
|
$
|
.5
|
|
|
$
|
27.4
|
|
|
Three Months
|
|
Six Months
|
||||||||||||
(millions)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Gross realized gains on security sales
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations
|
$
|
4.2
|
|
|
$
|
2.2
|
|
|
$
|
10.7
|
|
|
$
|
3.7
|
|
State and local government obligations
|
0
|
|
|
0
|
|
|
4.4
|
|
|
6.8
|
|
||||
Corporate and other debt securities
|
9.8
|
|
|
12.6
|
|
|
32.9
|
|
|
36.7
|
|
||||
Residential mortgage-backed securities
|
1.0
|
|
|
1.7
|
|
|
2.0
|
|
|
2.1
|
|
||||
Commercial mortgage-backed securities
|
3.5
|
|
|
4.3
|
|
|
9.6
|
|
|
8.3
|
|
||||
Redeemable preferred stocks
|
.4
|
|
|
0
|
|
|
.4
|
|
|
0
|
|
||||
Total fixed maturities
|
18.9
|
|
|
20.8
|
|
|
60.0
|
|
|
57.6
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Nonredeemable preferred stocks
|
33.2
|
|
|
62.7
|
|
|
59.1
|
|
|
101.2
|
|
||||
Common equities
|
9.4
|
|
|
12.3
|
|
|
92.4
|
|
|
15.0
|
|
||||
Subtotal gross realized gains on security sales
|
61.5
|
|
|
95.8
|
|
|
211.5
|
|
|
173.8
|
|
||||
Gross realized losses on security sales
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations
|
(.4
|
)
|
|
(1.1
|
)
|
|
(5.1
|
)
|
|
(1.4
|
)
|
||||
State and local government obligations
|
(.1
|
)
|
|
0
|
|
|
(.2
|
)
|
|
0
|
|
||||
Corporate and other debt securities
|
(.1
|
)
|
|
(.6
|
)
|
|
(2.3
|
)
|
|
(1.0
|
)
|
||||
Residential mortgage-backed securities
|
(.2
|
)
|
|
0
|
|
|
(.2
|
)
|
|
0
|
|
||||
Commercial mortgage-backed securities
|
(4.1
|
)
|
|
(.7
|
)
|
|
(6.8
|
)
|
|
(.7
|
)
|
||||
Redeemable preferred stocks
|
0
|
|
|
0
|
|
|
(3.2
|
)
|
|
(.1
|
)
|
||||
Total fixed maturities
|
(4.9
|
)
|
|
(2.4
|
)
|
|
(17.8
|
)
|
|
(3.2
|
)
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common equities
|
0
|
|
|
(.3
|
)
|
|
(3.4
|
)
|
|
(.3
|
)
|
||||
Subtotal gross realized losses on security sales
|
(4.9
|
)
|
|
(2.7
|
)
|
|
(21.2
|
)
|
|
(3.5
|
)
|
||||
Net realized gains (losses) on security sales
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. government obligations
|
3.8
|
|
|
1.1
|
|
|
5.6
|
|
|
2.3
|
|
||||
State and local government obligations
|
(.1
|
)
|
|
0
|
|
|
4.2
|
|
|
6.8
|
|
||||
Corporate and other debt securities
|
9.7
|
|
|
12.0
|
|
|
30.6
|
|
|
35.7
|
|
||||
Residential mortgage-backed securities
|
.8
|
|
|
1.7
|
|
|
1.8
|
|
|
2.1
|
|
||||
Commercial mortgage-backed securities
|
(.6
|
)
|
|
3.6
|
|
|
2.8
|
|
|
7.6
|
|
||||
Redeemable preferred stocks
|
.4
|
|
|
0
|
|
|
(2.8
|
)
|
|
(.1
|
)
|
||||
Total fixed maturities
|
14.0
|
|
|
18.4
|
|
|
42.2
|
|
|
54.4
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Nonredeemable preferred stocks
|
33.2
|
|
|
62.7
|
|
|
59.1
|
|
|
101.2
|
|
||||
Common equities
|
9.4
|
|
|
12.0
|
|
|
89.0
|
|
|
14.7
|
|
||||
Subtotal net realized gains (losses) on security sales
|
56.6
|
|
|
93.1
|
|
|
190.3
|
|
|
170.3
|
|
||||
Other-than-temporary impairment losses
|
|
|
|
|
|
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Residential mortgage-backed securities
|
0
|
|
|
(.3
|
)
|
|
0
|
|
|
(.4
|
)
|
||||
Total fixed maturities
|
0
|
|
|
(.3
|
)
|
|
0
|
|
|
(.4
|
)
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Common equities
|
0
|
|
|
(1.3
|
)
|
|
0
|
|
|
(1.4
|
)
|
||||
Subtotal other-than-temporary impairment losses
|
0
|
|
|
(1.6
|
)
|
|
0
|
|
|
(1.8
|
)
|
||||
Other gains (losses)
|
|
|
|
|
|
|
|
||||||||
Hybrid securities
|
3.7
|
|
|
(3.5
|
)
|
|
7.5
|
|
|
(1.2
|
)
|
||||
Derivative instruments
|
(19.9
|
)
|
|
44.9
|
|
|
(39.2
|
)
|
|
46.2
|
|
||||
Litigation settlements
|
0
|
|
|
0
|
|
|
1.2
|
|
|
0
|
|
||||
Subtotal other gains (losses)
|
(16.2
|
)
|
|
41.4
|
|
|
(30.5
|
)
|
|
45.0
|
|
||||
Total net realized gains (losses) on securities
|
$
|
40.4
|
|
|
$
|
132.9
|
|
|
$
|
159.8
|
|
|
$
|
213.5
|
|
|
Three Months
|
|
Six Months
|
||||||||||
(millions)
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
||||
Fixed maturities:
|
|
|
|
|
|
||||||||
U.S. government obligations
|
$
|
12.0
|
|
$
|
12.1
|
|
|
$
|
25.0
|
|
$
|
23.9
|
|
State and local government obligations
|
12.6
|
|
11.1
|
|
|
25.4
|
|
22.5
|
|
||||
Foreign government obligations
|
.1
|
|
0
|
|
|
.2
|
|
0
|
|
||||
Corporate debt securities
|
18.8
|
|
24.2
|
|
|
40.8
|
|
49.8
|
|
||||
Residential mortgage-backed securities
|
11.3
|
|
5.7
|
|
|
21.2
|
|
10.2
|
|
||||
Commercial mortgage-backed securities
|
16.0
|
|
18.1
|
|
|
32.7
|
|
36.8
|
|
||||
Other asset-backed securities
|
3.7
|
|
4.2
|
|
|
7.9
|
|
7.7
|
|
||||
Redeemable preferred stocks
|
3.9
|
|
5.4
|
|
|
8.0
|
|
10.8
|
|
||||
Total fixed maturities
|
78.4
|
|
80.8
|
|
|
161.2
|
|
161.7
|
|
||||
Equity securities:
|
|
|
|
|
|
||||||||
Nonredeemable preferred stocks
|
9.3
|
|
8.9
|
|
|
19.2
|
|
18.1
|
|
||||
Common equities
|
11.2
|
|
11.8
|
|
|
21.6
|
|
21.5
|
|
||||
Short-term investments:
|
|
|
|
|
|
||||||||
Other short-term investments
|
.3
|
|
.7
|
|
|
.5
|
|
1.4
|
|
||||
Investment income
|
99.2
|
|
102.2
|
|
|
202.5
|
|
202.7
|
|
||||
Investment expenses
|
(6.0
|
)
|
(4.4
|
)
|
|
(10.1
|
)
|
(9.3
|
)
|
||||
Net investment income
|
$
|
93.2
|
|
$
|
97.8
|
|
|
$
|
192.4
|
|
$
|
193.4
|
|
(millions)
|
|
|
|
|
Balance Sheet
2
|
|
Comprehensive Income Statement
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Assets (Liabilities)
Fair Value |
|
Net Realized
Gains (Losses) on Securities
|
||||||||||||||||||||||||||||||||||
|
Notional Value
1
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||||||||
|
June 30,
|
|
Dec. 31,
|
|
|
|
|
|
June 30,
|
|
Dec. 31,
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||||||||||||
Derivatives designated as:
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
Purpose
|
|
Classification
|
|
2014
|
|
|
2013
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||||||||
Hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Ineffective cash flow hedge
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
54
|
|
|
Manage interest
rate risk
|
|
NA
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Non-hedging instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest rate swaps
|
750
|
|
|
750
|
|
|
750
|
|
|
Manage portfolio
duration
|
|
Investments—
fixed maturities
|
|
35.1
|
|
|
52.4
|
|
|
68.1
|
|
|
(19.9
|
)
|
|
50.2
|
|
|
(39.2
|
)
|
|
50.2
|
|
||||||||||
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest rate swaps
|
0
|
|
|
1,263
|
|
|
1,263
|
|
|
Manage portfolio
duration
|
|
NA
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(5.3
|
)
|
|
0
|
|
|
(4.0
|
)
|
||||||||||
Total
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
|
|
|
|
$
|
35.1
|
|
|
$
|
52.4
|
|
|
$
|
68.1
|
|
|
$
|
(19.9
|
)
|
|
$
|
44.9
|
|
|
$
|
(39.2
|
)
|
|
$
|
46.2
|
|
•
|
Level 1
: Inputs are unadjusted quoted prices in active markets for identical instruments at the measurement date (e.g., U.S. government obligations, active exchange-traded equity securities, and certain short-term securities).
|
•
|
Level 2
: Inputs (other than quoted prices included within Level 1) that are observable for the instrument either directly or indirectly (e.g., certain corporate and municipal bonds and certain preferred stocks). This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments, and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.
|
•
|
Level 3
: Inputs that are unobservable. Unobservable inputs reflect our subjective evaluation about the assumptions market participants would use in pricing the financial instrument (e.g., certain structured securities and privately held investments).
|
|
Fair Value
|
|
|
||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Cost
|
|
|||||
June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
3,289.4
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,289.4
|
|
|
$
|
3,249.0
|
|
State and local government obligations
|
0
|
|
|
2,331.2
|
|
|
0
|
|
|
2,331.2
|
|
|
2,287.2
|
|
|||||
Foreign government obligations
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
Corporate debt securities
|
0
|
|
|
2,262.8
|
|
|
0
|
|
|
2,262.8
|
|
|
2,215.4
|
|
|||||
Subtotal
|
3,289.4
|
|
|
4,594.0
|
|
|
0
|
|
|
7,883.4
|
|
|
7,751.6
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,335.4
|
|
|
0
|
|
|
1,335.4
|
|
|
1,312.0
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
1,991.7
|
|
|
27.6
|
|
|
2,019.3
|
|
|
1,974.4
|
|
|||||
Other asset-backed
|
0
|
|
|
973.0
|
|
|
0
|
|
|
973.0
|
|
|
965.4
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
4,300.1
|
|
|
27.6
|
|
|
4,327.7
|
|
|
4,251.8
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
103.4
|
|
|
0
|
|
|
103.4
|
|
|
79.2
|
|
|||||
Utilities
|
0
|
|
|
65.3
|
|
|
0
|
|
|
65.3
|
|
|
65.0
|
|
|||||
Industrials
|
0
|
|
|
118.8
|
|
|
0
|
|
|
118.8
|
|
|
117.8
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
287.5
|
|
|
0
|
|
|
287.5
|
|
|
262.0
|
|
|||||
Total fixed maturities
|
3,289.4
|
|
|
9,181.6
|
|
|
27.6
|
|
|
12,498.6
|
|
|
12,265.4
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
238.7
|
|
|
477.7
|
|
|
43.8
|
|
|
760.2
|
|
|
497.1
|
|
|||||
Utilities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|||||
Subtotal nonredeemable preferred stocks
|
238.7
|
|
|
477.7
|
|
|
43.8
|
|
|
760.2
|
|
|
497.1
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,381.2
|
|
|
0
|
|
|
0
|
|
|
2,381.2
|
|
|
1,264.7
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
.5
|
|
|
.5
|
|
|
.5
|
|
|||||
Subtotal common equities
|
2,381.2
|
|
|
0
|
|
|
.5
|
|
|
2,381.7
|
|
|
1,265.2
|
|
|||||
Total fixed maturities and equity securities
|
5,909.3
|
|
|
9,659.3
|
|
|
71.9
|
|
|
15,640.5
|
|
|
14,027.7
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other short-term investments
|
2,843.3
|
|
|
275.4
|
|
|
0
|
|
|
3,118.7
|
|
|
3,118.7
|
|
|||||
Total portfolio
|
$
|
8,752.6
|
|
|
$
|
9,934.7
|
|
|
$
|
71.9
|
|
|
$
|
18,759.2
|
|
|
$
|
17,146.4
|
|
Debt
|
$
|
0
|
|
|
$
|
2,551.6
|
|
|
$
|
0
|
|
|
$
|
2,551.6
|
|
|
$
|
2,208.0
|
|
|
Fair Value
|
|
|
||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Cost
|
|
|||||
June 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
3,410.8
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,410.8
|
|
|
$
|
3,362.8
|
|
State and local government obligations
|
0
|
|
|
2,019.9
|
|
|
0
|
|
|
2,019.9
|
|
|
2,010.6
|
|
|||||
Foreign government obligations
|
16.4
|
|
|
0
|
|
|
0
|
|
|
16.4
|
|
|
16.4
|
|
|||||
Corporate debt securities
|
0
|
|
|
3,072.0
|
|
|
0
|
|
|
3,072.0
|
|
|
3,048.8
|
|
|||||
Subtotal
|
3,427.2
|
|
|
5,091.9
|
|
|
0
|
|
|
8,519.1
|
|
|
8,438.6
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
729.6
|
|
|
157.1
|
|
|
886.7
|
|
|
870.9
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,194.2
|
|
|
27.6
|
|
|
2,221.8
|
|
|
2,213.9
|
|
|||||
Other asset-backed
|
0
|
|
|
947.7
|
|
|
0
|
|
|
947.7
|
|
|
941.7
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
3,871.5
|
|
|
184.7
|
|
|
4,056.2
|
|
|
4,026.5
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
132.6
|
|
|
0
|
|
|
132.6
|
|
|
113.7
|
|
|||||
Utilities
|
0
|
|
|
66.4
|
|
|
0
|
|
|
66.4
|
|
|
64.9
|
|
|||||
Industrials
|
0
|
|
|
175.1
|
|
|
0
|
|
|
175.1
|
|
|
180.4
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
374.1
|
|
|
0
|
|
|
374.1
|
|
|
359.0
|
|
|||||
Total fixed maturities
|
3,427.2
|
|
|
9,337.5
|
|
|
184.7
|
|
|
12,949.4
|
|
|
12,824.1
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
256.6
|
|
|
446.2
|
|
|
34.8
|
|
|
737.6
|
|
|
402.6
|
|
|||||
Utilities
|
0
|
|
|
16.8
|
|
|
0
|
|
|
16.8
|
|
|
14.2
|
|
|||||
Subtotal nonredeemable preferred stocks
|
256.6
|
|
|
463.0
|
|
|
34.8
|
|
|
754.4
|
|
|
416.8
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,185.8
|
|
|
0
|
|
|
0
|
|
|
2,185.8
|
|
|
1,435.1
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
38.7
|
|
|
38.7
|
|
|
3.1
|
|
|||||
Subtotal common equities
|
2,185.8
|
|
|
0
|
|
|
38.7
|
|
|
2,224.5
|
|
|
1,438.2
|
|
|||||
Total fixed maturities and equity securities
|
5,869.6
|
|
|
9,800.5
|
|
|
258.2
|
|
|
15,928.3
|
|
|
14,679.1
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other short-term investments
|
1,117.8
|
|
|
440.3
|
|
|
0
|
|
|
1,558.1
|
|
|
1,558.1
|
|
|||||
Total portfolio
|
$
|
6,987.4
|
|
|
$
|
10,240.8
|
|
|
$
|
258.2
|
|
|
$
|
17,486.4
|
|
|
$
|
16,237.2
|
|
Debt
|
$
|
0
|
|
|
$
|
2,300.8
|
|
|
$
|
0
|
|
|
$
|
2,300.8
|
|
|
$
|
2,063.9
|
|
|
Fair Value
|
|
|
||||||||||||||||
(millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Cost
|
|
|||||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government obligations
|
$
|
3,662.2
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,662.2
|
|
|
$
|
3,630.4
|
|
State and local government obligations
|
0
|
|
|
2,256.0
|
|
|
0
|
|
|
2,256.0
|
|
|
2,247.3
|
|
|||||
Foreign government obligations
|
15.6
|
|
|
0
|
|
|
0
|
|
|
15.6
|
|
|
15.6
|
|
|||||
Corporate debt securities
|
0
|
|
|
2,926.6
|
|
|
0
|
|
|
2,926.6
|
|
|
2,885.0
|
|
|||||
Subtotal
|
3,677.8
|
|
|
5,182.6
|
|
|
0
|
|
|
8,860.4
|
|
|
8,778.3
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
0
|
|
|
1,127.7
|
|
|
.2
|
|
|
1,127.9
|
|
|
1,110.1
|
|
|||||
Commercial mortgage-backed
|
0
|
|
|
2,131.5
|
|
|
29.0
|
|
|
2,160.5
|
|
|
2,154.4
|
|
|||||
Other asset-backed
|
0
|
|
|
1,077.7
|
|
|
0
|
|
|
1,077.7
|
|
|
1,073.0
|
|
|||||
Subtotal asset-backed securities
|
0
|
|
|
4,336.9
|
|
|
29.2
|
|
|
4,366.1
|
|
|
4,337.5
|
|
|||||
Redeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
0
|
|
|
102.8
|
|
|
0
|
|
|
102.8
|
|
|
84.2
|
|
|||||
Utilities
|
0
|
|
|
65.6
|
|
|
0
|
|
|
65.6
|
|
|
64.9
|
|
|||||
Industrials
|
0
|
|
|
145.5
|
|
|
0
|
|
|
145.5
|
|
|
150.4
|
|
|||||
Subtotal redeemable preferred stocks
|
0
|
|
|
313.9
|
|
|
0
|
|
|
313.9
|
|
|
299.5
|
|
|||||
Total fixed maturities
|
3,677.8
|
|
|
9,833.4
|
|
|
29.2
|
|
|
13,540.4
|
|
|
13,415.3
|
|
|||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
||||||||||
Financials
|
240.8
|
|
|
414.6
|
|
|
39.0
|
|
|
694.4
|
|
|
431.5
|
|
|||||
Utilities
|
0
|
|
|
16.8
|
|
|
0
|
|
|
16.8
|
|
|
14.2
|
|
|||||
Subtotal nonredeemable preferred stocks
|
240.8
|
|
|
431.4
|
|
|
39.0
|
|
|
711.2
|
|
|
445.7
|
|
|||||
Common equities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stocks
|
2,530.0
|
|
|
0
|
|
|
0
|
|
|
2,530.0
|
|
|
1,450.6
|
|
|||||
Other risk investments
|
0
|
|
|
0
|
|
|
.5
|
|
|
.5
|
|
|
.5
|
|
|||||
Subtotal common equities
|
2,530.0
|
|
|
0
|
|
|
.5
|
|
|
2,530.5
|
|
|
1,451.1
|
|
|||||
Total fixed maturities and equity securities
|
6,448.6
|
|
|
10,264.8
|
|
|
68.7
|
|
|
16,782.1
|
|
|
15,312.1
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other short-term investments
|
987.8
|
|
|
284.8
|
|
|
0
|
|
|
1,272.6
|
|
|
1,272.6
|
|
|||||
Total portfolio
|
$
|
7,436.4
|
|
|
$
|
10,549.6
|
|
|
$
|
68.7
|
|
|
$
|
18,054.7
|
|
|
$
|
16,584.7
|
|
Debt
|
$
|
0
|
|
|
$
|
2,073.7
|
|
|
$
|
0
|
|
|
$
|
2,073.7
|
|
|
$
|
1,860.9
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Three Months Ended June 30, 2014
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at March 31, 2014
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at June 30, 2014
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential mortgage-backed
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(.1
|
)
|
|
$
|
.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Commercial mortgage-backed
|
28.6
|
|
|
(1.3
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
.3
|
|
|
0
|
|
|
27.6
|
|
||||||||
Total fixed maturities
|
28.6
|
|
|
(1.3
|
)
|
|
0
|
|
|
(.1
|
)
|
|
.1
|
|
|
.3
|
|
|
0
|
|
|
27.6
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financials
1
|
42.1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1.7
|
|
|
0
|
|
|
43.8
|
|
||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
.4
|
|
|
.1
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
.5
|
|
||||||||
Total Level 3 securities
|
$
|
71.1
|
|
|
$
|
(1.2
|
)
|
|
$
|
0
|
|
|
$
|
(.1
|
)
|
|
$
|
.1
|
|
|
$
|
2.0
|
|
|
$
|
0
|
|
|
$
|
71.9
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Six Months Ended June 30, 2014
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at Dec. 31, 2013
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at June 30, 2014
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential mortgage-backed
|
$
|
.2
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(.1
|
)
|
|
$
|
.1
|
|
|
$
|
(.2
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
Commercial mortgage-backed
|
29.0
|
|
|
(1.8
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
.4
|
|
|
0
|
|
|
27.6
|
|
||||||||
Total fixed maturities
|
29.2
|
|
|
(1.8
|
)
|
|
0
|
|
|
(.1
|
)
|
|
.1
|
|
|
.2
|
|
|
0
|
|
|
27.6
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financials
1
|
39.0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
4.8
|
|
|
0
|
|
|
43.8
|
|
||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
.5
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
.5
|
|
||||||||
Total Level 3 securities
|
$
|
68.7
|
|
|
$
|
(1.8
|
)
|
|
$
|
0
|
|
|
$
|
(.1
|
)
|
|
$
|
.1
|
|
|
$
|
5.0
|
|
|
$
|
0
|
|
|
$
|
71.9
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Three Months Ended June 30, 2013
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at March 31, 2013
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in
Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at June 30, 2013
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential mortgage-backed
|
$
|
85.6
|
|
|
$
|
(6.3
|
)
|
|
$
|
79.9
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(2.1
|
)
|
|
$
|
0
|
|
|
$
|
157.1
|
|
Commercial mortgage-backed
|
27.3
|
|
|
(.4
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
.7
|
|
|
0
|
|
|
27.6
|
|
||||||||
Total fixed maturities
|
112.9
|
|
|
(6.7
|
)
|
|
79.9
|
|
|
0
|
|
|
0
|
|
|
(1.4
|
)
|
|
0
|
|
|
184.7
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financials
1
|
33.8
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
1.0
|
|
|
0
|
|
|
34.8
|
|
||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
12.0
|
|
|
(.1
|
)
|
|
.3
|
|
|
0
|
|
|
(.5
|
)
|
|
27.0
|
|
|
0
|
|
|
38.7
|
|
||||||||
Total Level 3 securities
|
$
|
158.7
|
|
|
$
|
(6.8
|
)
|
|
$
|
80.2
|
|
|
$
|
0
|
|
|
$
|
(.5
|
)
|
|
$
|
26.6
|
|
|
$
|
0
|
|
|
$
|
258.2
|
|
|
Level 3 Fair Value
|
||||||||||||||||||||||||||||||
|
Six Months Ended June 30, 2013
|
||||||||||||||||||||||||||||||
(millions)
|
Fair Value at Dec. 31, 2012
|
|
|
Calls/
Maturities/
Paydowns
|
|
|
Purchases
|
|
|
Sales
|
|
|
Net Realized (Gain) Loss on Sales
|
|
|
Change in
Valuation
|
|
|
Net
Transfers
In (Out)
|
|
|
Fair Value at June 30, 2013
|
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential mortgage-backed
|
$
|
45.5
|
|
|
$
|
(11.6
|
)
|
|
$
|
125.1
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(1.9
|
)
|
|
$
|
0
|
|
|
$
|
157.1
|
|
Commercial mortgage-backed
|
25.3
|
|
|
(.8
|
)
|
|
0
|
|
|
0
|
|
|
0
|
|
|
3.1
|
|
|
0
|
|
|
27.6
|
|
||||||||
Total fixed maturities
|
70.8
|
|
|
(12.4
|
)
|
|
125.1
|
|
|
0
|
|
|
0
|
|
|
1.2
|
|
|
0
|
|
|
184.7
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Financials
1
|
31.9
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
2.9
|
|
|
0
|
|
|
34.8
|
|
||||||||
Common equities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other risk investments
|
12.0
|
|
|
(.1
|
)
|
|
.3
|
|
|
0
|
|
|
(.5
|
)
|
|
27.0
|
|
|
0
|
|
|
38.7
|
|
||||||||
Total Level 3 securities
|
$
|
114.7
|
|
|
$
|
(12.5
|
)
|
|
$
|
125.4
|
|
|
$
|
0
|
|
|
$
|
(.5
|
)
|
|
$
|
31.1
|
|
|
$
|
0
|
|
|
$
|
258.2
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at June 30, 2014
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Residential mortgage-backed
|
$
|
0
|
|
|
|
|
|
|
|
|
Commercial mortgage-backed
|
27.6
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
|
|
Total fixed maturities
|
27.6
|
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|||
Financials
|
43.8
|
|
|
Multiple of tangible net book value
|
|
Price to book ratio multiple
|
|
1.9
|
|
|
Subtotal Level 3 securities
|
71.4
|
|
|
|
|
|
|
|
||
Pricing exemption securities
2
|
.5
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
71.9
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at June 30, 2013
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Residential mortgage-backed
|
$
|
13.9
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
1,0
|
|
Commercial mortgage-backed
|
27.6
|
|
|
External vendor
|
|
Prepayment rate
2
|
|
0
|
|
|
Total fixed maturities
|
41.5
|
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|||
Financials
|
34.8
|
|
|
Multiple of tangible net book value
|
|
Price to book ratio multiple
|
|
1.9
|
|
|
Subtotal Level 3 securities
|
76.3
|
|
|
|
|
|
|
|
||
Pricing exemption securities
3
|
181.9
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
258.2
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|||||||||
($ in millions)
|
Fair Value at Dec. 31, 2013
|
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Unobservable
Input Assumption |
|
|
Fixed maturities:
|
|
|
|
|
|
|
|
|||
Asset-backed securities:
|
|
|
|
|
|
|
|
|||
Residential mortgage-backed
|
$
|
.2
|
|
|
External vendor
|
|
Prepayment rate
1
|
|
0
|
|
Commercial mortgage-backed
|
29.0
|
|
|
External vendor
|
|
Prepayment rate
2
|
|
0
|
|
|
Total fixed maturities
|
29.2
|
|
|
|
|
|
|
|
||
Equity securities:
|
|
|
|
|
|
|
|
|||
Nonredeemable preferred stocks:
|
|
|
|
|
|
|
|
|||
Financials
|
39.0
|
|
|
Multiple of tangible net book value
|
|
Price to book ratio multiple
|
|
1.9
|
|
|
Subtotal Level 3 securities
|
68.2
|
|
|
|
|
|
|
|
||
Pricing exemption securities
3
|
.5
|
|
|
|
|
|
|
|
||
Total Level 3 securities
|
$
|
68.7
|
|
|
|
|
|
|
|
|
June 30, 2014
|
|
June 30, 2013
|
|
December 31, 2013
|
||||||||||||||||||
(millions)
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||||||
7% Notes due 2013
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
150.0
|
|
|
$
|
152.3
|
|
|
$
|
0
|
|
|
$
|
0
|
|
3.75% Senior Notes due 2021
|
497.7
|
|
|
532.8
|
|
|
497.4
|
|
|
517.6
|
|
|
497.6
|
|
|
509.1
|
|
||||||
6 5/8% Senior Notes due 2029
|
295.4
|
|
|
395.9
|
|
|
295.2
|
|
|
362.1
|
|
|
295.3
|
|
|
359.6
|
|
||||||
6.25% Senior Notes due 2032
|
394.7
|
|
|
514.7
|
|
|
394.6
|
|
|
479.1
|
|
|
394.6
|
|
|
473.7
|
|
||||||
4.35% Senior Notes due 2044
|
346.3
|
|
|
355.0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067
|
673.9
|
|
|
753.2
|
|
|
726.7
|
|
|
789.7
|
|
|
673.4
|
|
|
731.3
|
|
||||||
Total
|
$
|
2,208.0
|
|
|
$
|
2,551.6
|
|
|
$
|
2,063.9
|
|
|
$
|
2,300.8
|
|
|
$
|
1,860.9
|
|
|
$
|
2,073.7
|
|
|
Six Months Ended June 30,
|
||||||
(millions)
|
2014
|
|
|
2013
|
|
||
Income taxes
|
$
|
240.0
|
|
|
$
|
265.0
|
|
Interest
|
54.5
|
|
|
61.6
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||||||||||
(millions)
|
Revenues
|
|
Pretax
Profit
(Loss)
|
|
Revenues
|
|
Pretax
Profit
(Loss)
|
|
Revenues
|
|
Pretax
Profit
(Loss)
|
|
Revenues
|
|
Pretax
Profit
(Loss)
|
||||||||||||||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
$
|
2,242.3
|
|
|
$
|
142.9
|
|
|
$
|
2,151.5
|
|
|
$
|
131.5
|
|
|
$
|
4,445.5
|
|
|
$
|
321.5
|
|
|
$
|
4,258.7
|
|
|
$
|
306.4
|
|
Direct
|
1,824.0
|
|
|
115.7
|
|
|
1,685.4
|
|
|
126.0
|
|
|
3,586.2
|
|
|
186.7
|
|
|
3,327.0
|
|
|
253.2
|
|
||||||||
Total Personal Lines
1
|
4,066.3
|
|
|
258.6
|
|
|
3,836.9
|
|
|
257.5
|
|
|
8,031.7
|
|
|
508.2
|
|
|
7,585.7
|
|
|
559.6
|
|
||||||||
Commercial Lines
|
447.2
|
|
|
78.4
|
|
|
440.1
|
|
|
32.1
|
|
|
884.1
|
|
|
119.3
|
|
|
870.5
|
|
|
47.4
|
|
||||||||
Other indemnity
|
0
|
|
|
(4.7
|
)
|
|
0
|
|
|
(3.8
|
)
|
|
0
|
|
|
(5.4
|
)
|
|
.1
|
|
|
(3.5
|
)
|
||||||||
Total underwriting operations
|
4,513.5
|
|
|
332.3
|
|
|
4,277.0
|
|
|
285.8
|
|
|
8,915.8
|
|
|
622.1
|
|
|
8,456.3
|
|
|
603.5
|
|
||||||||
Fees and other revenues
2
|
74.4
|
|
|
NA
|
|
|
70.9
|
|
|
NA
|
|
|
147.2
|
|
|
NA
|
|
|
139.3
|
|
|
NA
|
|
||||||||
Service businesses
|
14.0
|
|
|
1.1
|
|
|
10.6
|
|
|
.2
|
|
|
23.8
|
|
|
1.2
|
|
|
19.0
|
|
|
0
|
|
||||||||
Investments
3
|
139.6
|
|
|
133.6
|
|
|
235.1
|
|
|
230.7
|
|
|
362.3
|
|
|
352.2
|
|
|
416.2
|
|
|
406.9
|
|
||||||||
Interest expense
|
NA
|
|
|
(29.6
|
)
|
|
NA
|
|
|
(30.4
|
)
|
|
NA
|
|
|
(56.3
|
)
|
|
NA
|
|
|
(61.0
|
)
|
||||||||
Consolidated total
|
$
|
4,741.5
|
|
|
$
|
437.4
|
|
|
$
|
4,593.6
|
|
|
$
|
486.3
|
|
|
$
|
9,449.1
|
|
|
$
|
919.2
|
|
|
$
|
9,030.8
|
|
|
$
|
949.4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||
|
Under-writing
Margin |
|
Combined
Ratio
|
|
Under-writing
Margin |
|
Combined
Ratio
|
|
Under-writing
Margin
|
|
Combined
Ratio
|
|
Under-writing
Margin
|
|
Combined
Ratio
|
||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Agency
|
6.4
|
%
|
|
93.6
|
|
6.1
|
%
|
|
93.9
|
|
7.2
|
%
|
|
92.8
|
|
7.2
|
%
|
|
92.8
|
Direct
|
6.3
|
|
|
93.7
|
|
7.5
|
|
|
92.5
|
|
5.2
|
|
|
94.8
|
|
7.6
|
|
|
92.4
|
Total Personal Lines
|
6.4
|
|
|
93.6
|
|
6.7
|
|
|
93.3
|
|
6.3
|
|
|
93.7
|
|
7.4
|
|
|
92.6
|
Commercial Lines
|
17.5
|
|
|
82.5
|
|
7.3
|
|
|
92.7
|
|
13.5
|
|
|
86.5
|
|
5.4
|
|
|
94.6
|
Other indemnity
1
|
NM
|
|
|
NM
|
|
NM
|
|
|
NM
|
|
NM
|
|
|
NM
|
|
NM
|
|
|
NM
|
Total underwriting operations
|
7.4
|
|
|
92.6
|
|
6.7
|
|
|
93.3
|
|
7.0
|
|
|
93.0
|
|
7.1
|
|
|
92.9
|
|
|
|
|
|
|
|
Components of Changes in
Accumulated Other
Comprehensive Income (after tax)
|
||||||||||||||||
(millions)
|
Pretax total
accumulated
other
comprehensive
income
|
|
|
Total tax
(provision)
benefit
|
|
|
After tax total
accumulated
other
comprehensive
income
|
|
|
Total net
unrealized
gains (losses)
on securities
|
|
|
Net
unrealized
gains on
forecasted
transactions
1,2
|
|
|
Foreign
currency
translation
adjustment
|
|
||||||
Balance at March 31, 2014
|
$
|
1,463.5
|
|
|
$
|
(512.2
|
)
|
|
$
|
951.3
|
|
|
$
|
946.9
|
|
|
$
|
3.8
|
|
|
$
|
.6
|
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment securities
|
188.9
|
|
|
(66.1
|
)
|
|
122.8
|
|
|
122.8
|
|
|
0
|
|
|
0
|
|
||||||
Net non-credit related OTTI losses, adjusted for
valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Forecasted transactions
|
(1.6
|
)
|
|
.6
|
|
|
(1.0
|
)
|
|
0
|
|
|
(1.0
|
)
|
|
0
|
|
||||||
Foreign currency translation adjustment
|
.8
|
|
|
(.3
|
)
|
|
.5
|
|
|
0
|
|
|
0
|
|
|
.5
|
|
||||||
Total other comprehensive income (loss) before reclassifications
|
188.1
|
|
|
(65.8
|
)
|
|
122.3
|
|
|
122.8
|
|
|
(1.0
|
)
|
|
.5
|
|
||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net impairment losses recognized in earnings
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Net realized gains (losses) on securities
|
52.9
|
|
|
(18.5
|
)
|
|
34.4
|
|
|
34.4
|
|
|
0
|
|
|
0
|
|
||||||
Interest expense
2
|
.5
|
|
|
(.2
|
)
|
|
.3
|
|
|
0
|
|
|
.3
|
|
|
0
|
|
||||||
Total reclassification adjustment for amounts realized in net income
|
53.4
|
|
|
(18.7
|
)
|
|
34.7
|
|
|
34.4
|
|
|
.3
|
|
|
0
|
|
||||||
Total other comprehensive income (loss)
|
134.7
|
|
|
(47.1
|
)
|
|
87.6
|
|
|
88.4
|
|
|
(1.3
|
)
|
|
.5
|
|
||||||
Balance at June 30, 2014
|
$
|
1,598.2
|
|
|
$
|
(559.3
|
)
|
|
$
|
1,038.9
|
|
|
$
|
1,035.3
|
|
|
$
|
2.5
|
|
|
$
|
1.1
|
|
|
|
|
|
|
|
|
Components of Changes in
Accumulated Other Comprehensive Income (after tax) |
||||||||||||||||
(millions)
|
Pretax total
accumulated
other
comprehensive
income
|
|
|
Total tax
(provision)
benefit
|
|
|
After tax total
accumulated
other
comprehensive
income
|
|
|
Total net
unrealized
gains (losses)
on securities
|
|
|
Net
unrealized
gains on
forecasted
transactions
1,2
|
|
|
Foreign
currency
translation
adjustment
|
|
||||||
Balance at December 31, 2013
|
$
|
1,464.1
|
|
|
$
|
(512.4
|
)
|
|
$
|
951.7
|
|
|
$
|
947.0
|
|
|
$
|
4.1
|
|
|
$
|
.6
|
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment securities
|
320.7
|
|
|
(112.2
|
)
|
|
208.5
|
|
|
208.5
|
|
|
0
|
|
|
0
|
|
||||||
Net non-credit related OTTI losses, adjusted for
valuation changes
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Forecasted transactions
|
(1.6
|
)
|
|
.6
|
|
|
(1.0
|
)
|
|
0
|
|
|
(1.0
|
)
|
|
0
|
|
||||||
Foreign currency translation adjustment
|
.8
|
|
|
(.3
|
)
|
|
.5
|
|
|
0
|
|
|
0
|
|
|
.5
|
|
||||||
Total other comprehensive income (loss) before reclassifications
|
319.9
|
|
|
(111.9
|
)
|
|
208.0
|
|
|
208.5
|
|
|
(1.0
|
)
|
|
.5
|
|
||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net impairment losses recognized in earnings
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Net realized gains (losses) on securities
|
184.8
|
|
|
(64.6
|
)
|
|
120.2
|
|
|
120.2
|
|
|
0
|
|
|
0
|
|
||||||
Interest expense
2
|
1.0
|
|
|
(.4
|
)
|
|
.6
|
|
|
0
|
|
|
.6
|
|
|
0
|
|
||||||
Total reclassification adjustment for amounts realized in net income
|
185.8
|
|
|
(65.0
|
)
|
|
120.8
|
|
|
120.2
|
|
|
.6
|
|
|
0
|
|
||||||
Total other comprehensive income (loss)
|
134.1
|
|
|
(46.9
|
)
|
|
87.2
|
|
|
88.3
|
|
|
(1.6
|
)
|
|
.5
|
|
||||||
Balance at June 30, 2014
|
$
|
1,598.2
|
|
|
$
|
(559.3
|
)
|
|
$
|
1,038.9
|
|
|
$
|
1,035.3
|
|
|
$
|
2.5
|
|
|
$
|
1.1
|
|
|
|
|
|
|
|
|
Components of Changes in
Accumulated Other
Comprehensive Income (after tax)
|
||||||||||||||||
(millions)
|
Pretax total
accumulated
other
comprehensive
income
|
|
|
Total tax
(provision)
benefit
|
|
|
After tax total
accumulated
other
comprehensive
income
|
|
|
Total net
unrealized
gains (losses)
on securities
|
|
|
Net
unrealized
gains on
forecasted
transactions
1
|
|
|
Foreign
currency
translation
adjustment
|
|
||||||
Balance at March 31, 2013
|
$
|
1,491.8
|
|
|
$
|
(522.1
|
)
|
|
$
|
969.7
|
|
|
$
|
961.9
|
|
|
$
|
5.8
|
|
|
$
|
2.0
|
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment securities
|
(147.1
|
)
|
|
51.5
|
|
|
(95.6
|
)
|
|
(95.6
|
)
|
|
0
|
|
|
0
|
|
||||||
Net non-credit related OTTI losses, adjusted for
valuation changes
|
.1
|
|
|
0
|
|
|
.1
|
|
|
.1
|
|
|
0
|
|
|
0
|
|
||||||
Forecasted transactions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Foreign currency translation adjustment
|
(1.2
|
)
|
|
.4
|
|
|
(.8
|
)
|
|
0
|
|
|
0
|
|
|
(.8
|
)
|
||||||
Total other comprehensive income (loss) before reclassifications
|
(148.2
|
)
|
|
51.9
|
|
|
(96.3
|
)
|
|
(95.5
|
)
|
|
0
|
|
|
(.8
|
)
|
||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net impairment losses recognized in earnings
|
(1.5
|
)
|
|
.5
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|
0
|
|
|
0
|
|
||||||
Net realized gains (losses) on securities
|
92.0
|
|
|
(32.2
|
)
|
|
59.8
|
|
|
59.8
|
|
|
0
|
|
|
0
|
|
||||||
Interest expense
|
.5
|
|
|
(.1
|
)
|
|
.4
|
|
|
0
|
|
|
.4
|
|
|
0
|
|
||||||
Total reclassification adjustment for amounts realized in net income
|
91.0
|
|
|
(31.8
|
)
|
|
59.2
|
|
|
58.8
|
|
|
.4
|
|
|
0
|
|
||||||
Total other comprehensive income (loss)
|
(239.2
|
)
|
|
83.7
|
|
|
(155.5
|
)
|
|
(154.3
|
)
|
|
(.4
|
)
|
|
(.8
|
)
|
||||||
Balance at June 30, 2013
|
$
|
1,252.6
|
|
|
$
|
(438.4
|
)
|
|
$
|
814.2
|
|
|
$
|
807.6
|
|
|
$
|
5.4
|
|
|
$
|
1.2
|
|
|
|
|
|
|
|
|
Components of Changes in
Accumulated Other Comprehensive Income (after tax) |
||||||||||||||||
(millions)
|
Pretax total
accumulated
other
comprehensive
income
|
|
|
Total tax
(provision)
benefit
|
|
|
After tax total
accumulated
other
comprehensive
income
|
|
|
Total net
unrealized
gains (losses)
on securities
|
|
|
Net
unrealized
gains on
forecasted
transactions
1
|
|
|
Foreign
currency
translation
adjustment
|
|
||||||
Balance at December 31, 2012
|
$
|
1,340.0
|
|
|
$
|
(469.0
|
)
|
|
$
|
871.0
|
|
|
$
|
862.7
|
|
|
$
|
6.1
|
|
|
$
|
2.2
|
|
Other comprehensive income (loss) before reclassifications:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment securities
|
80.7
|
|
|
(28.2
|
)
|
|
52.5
|
|
|
52.5
|
|
|
0
|
|
|
0
|
|
||||||
Net non-credit related OTTI losses, adjusted for
valuation changes
|
.4
|
|
|
(.1
|
)
|
|
.3
|
|
|
.3
|
|
|
0
|
|
|
0
|
|
||||||
Forecasted transactions
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Foreign currency translation adjustment
|
(1.5
|
)
|
|
.5
|
|
|
(1.0
|
)
|
|
0
|
|
|
0
|
|
|
(1.0
|
)
|
||||||
Total other comprehensive income (loss) before reclassifications
|
79.6
|
|
|
(27.8
|
)
|
|
51.8
|
|
|
52.8
|
|
|
0
|
|
|
(1.0
|
)
|
||||||
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net impairment losses recognized in earnings
|
(1.6
|
)
|
|
.6
|
|
|
(1.0
|
)
|
|
(1.0
|
)
|
|
0
|
|
|
0
|
|
||||||
Net realized gains (losses) on securities
|
167.6
|
|
|
(58.7
|
)
|
|
108.9
|
|
|
108.9
|
|
|
0
|
|
|
0
|
|
||||||
Interest expense
|
1.0
|
|
|
(.3
|
)
|
|
.7
|
|
|
0
|
|
|
.7
|
|
|
0
|
|
||||||
Total reclassification adjustment for amounts realized in net income
|
167.0
|
|
|
(58.4
|
)
|
|
108.6
|
|
|
107.9
|
|
|
.7
|
|
|
0
|
|
||||||
Total other comprehensive income (loss)
|
(87.4
|
)
|
|
30.6
|
|
|
(56.8
|
)
|
|
(55.1
|
)
|
|
(.7
|
)
|
|
(1.0
|
)
|
||||||
Balance at June 30, 2013
|
$
|
1,252.6
|
|
|
$
|
(438.4
|
)
|
|
$
|
814.2
|
|
|
$
|
807.6
|
|
|
$
|
5.4
|
|
|
$
|
1.2
|
|
•
|
Snapshot
®
, our usage-based insurance program – we continued with our marketing campaign to communicate the benefits of Snapshot in a way we believe will help demonstrate the advantages to consumers, such as the ability to better manage their insurance costs by exhibiting safe driving habits.
|
•
|
Expansion of our mobile acquisition capabilities – now that our technology is able to provide the capability for almost all combinations of cars and drivers to be quoted on a mobile device, we are continuing with our efforts to develop the means to provide people the opportunity to transact all their business with us on any device they choose (e.g., smartphone, tablet).
|
•
|
Multi-product penetration – our relationships with our non-affiliated homeowner insurance carriers continue to grow, as many of our customers now bundle auto and property coverages. During the second quarter, we began writing our own renters insurance product through our Agency channel in one state to further develop our bundling strategy.
|
•
|
common equities
|
•
|
nonredeemable preferred stocks
|
•
|
redeemable preferred stocks, except for 50% of investment-grade redeemable preferred stocks with cumulative dividends, which are included in Group II, and
|
•
|
all other non-investment-grade fixed-maturity securities
|
•
|
short-term securities, and
|
•
|
all other fixed-maturity securities, including 50% of the investment-grade redeemable preferred stocks with cumulative dividends
|
•
|
The first layer of capital, which we refer to as “regulatory capital,” is the amount of capital we need to satisfy state insurance regulatory requirements and support our objective of writing all the business we can write and service, consistent with our underwriting discipline of achieving a combined ratio of 96 or better. This capital is held by our various insurance entities.
|
•
|
The second layer of capital we call “extreme contingency.” While our regulatory capital is, by definition, a cushion for absorbing financial consequences of adverse events, such as loss reserve development, litigation, weather catastrophes, and investment market corrections, we view that as a base and hold additional capital for even more extreme conditions. The modeling used to quantify capital needs for these conditions is quite extensive, including tens of thousands of simulations, representing our best estimates of such contingencies based on historical experience. This capital is held either at a non-insurance subsidiary of the holding company or in our insurance entities, where it is potentially eligible for a dividend up to the holding company. Regulatory restrictions on subsidiary dividends are discussed in
Note 8 - Statutory Financial Information
in our Annual Report to Shareholders for the year ended December 31, 2013, which is included as Exhibit 13 to our Annual Report on Form 10-K.
|
•
|
The third layer of capital is capital in excess of the sum of the first two layers and provides maximum flexibility to repurchase stock or other securities, consider acquisitions, and pay dividends to shareholders, among other purposes. This capital is largely held at a non-insurance subsidiary of the holding company.
|
•
|
Repurchases of our outstanding debt securities.
From time to time, we may elect to repurchase our outstanding debt securities in the open market, or in privately negotiated transactions, reducing our future interest expense when management believes that such securities are attractively priced and capital is available for such a purpose. We did not repurchase any debt securities in the first half of 2014 or 2013. During the third quarter 2013, we repurchased, in the open market, $54.1 million in principal amount of our 6.70% Debentures. Since the amount paid exceeded the carrying value of the debt we repurchased, we recognized losses on these extinguishments of $4.3 million.
|
•
|
Repurchases of our common shares.
In accordance with our financial policies, we continued our practice of repurchasing our common shares. As of
June 30, 2014
, we had 25.3 million shares remaining under our 2011 Board repurchase authorization. The following table shows our share repurchase activity during the respective periods:
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(millions, except per share amounts)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Total number of shares purchased
|
1.8
|
|
|
3.0
|
|
|
5.7
|
|
|
5.3
|
|
||||
Total cost
|
$
|
45.3
|
|
|
$
|
75.4
|
|
|
$
|
140.0
|
|
|
$
|
126.7
|
|
Average price paid per share
|
$
|
24.45
|
|
|
$
|
25.19
|
|
|
$
|
24.39
|
|
|
$
|
24.07
|
|
•
|
Dividends.
As part of our capital management activities, in February
2014
and
2013
, we paid our annual variable dividend of
$.4929
per share and
$.2845
per share, respectively, which were each declared in December of the prior year. In addition to the annual variable dividend, the Board of Directors declared a $1.00 per common share special dividend in December 2013, which was paid in February 2014.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||
($ in millions)
|
2014
|
|
|
2013
|
|
|
%
Change
|
|
2014
|
|
|
2013
|
|
|
%
Change
|
||||
NET PREMIUMS WRITTEN
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency
|
$
|
2,291.0
|
|
|
$
|
2,223.7
|
|
|
3
|
|
$
|
4,583.6
|
|
|
$
|
4,425.9
|
|
|
4
|
Direct
|
1,828.9
|
|
|
1,681.1
|
|
|
9
|
|
3,755.5
|
|
|
3,467.4
|
|
|
8
|
||||
Total Personal Lines
|
4,119.9
|
|
|
3,904.8
|
|
|
6
|
|
8,339.1
|
|
|
7,893.3
|
|
|
6
|
||||
Commercial Lines
|
507.8
|
|
|
482.3
|
|
|
5
|
|
969.6
|
|
|
943.2
|
|
|
3
|
||||
Other indemnity
|
0
|
|
|
0
|
|
|
NM
|
|
0
|
|
|
0
|
|
|
NM
|
||||
Total underwriting operations
|
$
|
4,627.7
|
|
|
$
|
4,387.1
|
|
|
5
|
|
$
|
9,308.7
|
|
|
$
|
8,836.5
|
|
|
5
|
NET PREMIUMS EARNED
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Agency
|
$
|
2,242.3
|
|
|
$
|
2,151.5
|
|
|
4
|
|
$
|
4,445.5
|
|
|
$
|
4,258.7
|
|
|
4
|
Direct
|
1,824.0
|
|
|
1,685.4
|
|
|
8
|
|
3,586.2
|
|
|
3,327.0
|
|
|
8
|
||||
Total Personal Lines
|
4,066.3
|
|
|
3,836.9
|
|
|
6
|
|
8,031.7
|
|
|
7,585.7
|
|
|
6
|
||||
Commercial Lines
|
447.2
|
|
|
440.1
|
|
|
2
|
|
884.1
|
|
|
870.5
|
|
|
2
|
||||
Other indemnity
|
0
|
|
|
0
|
|
|
NM
|
|
0
|
|
|
.1
|
|
|
(100)
|
||||
Total underwriting operations
|
$
|
4,513.5
|
|
|
$
|
4,277.0
|
|
|
6
|
|
$
|
8,915.8
|
|
|
$
|
8,456.3
|
|
|
5
|
NM = Not Meaningful
|
|
|
|
|
|
|
|
|
|
|
|
(thousands)
|
2014
|
|
|
2013
|
|
|
%
Change
|
POLICIES IN FORCE
|
|
|
|
|
|
||
Agency auto
|
4,872.7
|
|
|
4,849.3
|
|
|
0
|
Direct auto
|
4,423.9
|
|
|
4,134.6
|
|
|
7
|
Total auto
|
9,296.6
|
|
|
8,983.9
|
|
|
3
|
Special lines
1
|
4,064.3
|
|
|
4,023.9
|
|
|
1
|
Total Personal Lines
|
13,360.9
|
|
|
13,007.8
|
|
|
3
|
Commercial Lines
|
516.5
|
|
|
526.6
|
|
|
(2)
|
|
Growth Over Prior Year
|
||||||
|
Quarter
|
|
Year-to-date
|
||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
APPLICATIONS
|
|
|
|
|
|
|
|
Personal Lines:
|
|
|
|
|
|
|
|
New
|
(2)%
|
|
(4)%
|
|
1%
|
|
(8)%
|
Renewal
|
3%
|
|
3%
|
|
3%
|
|
4%
|
Commercial Lines:
|
|
|
|
|
|
|
|
New
|
(1)%
|
|
(7)%
|
|
(5)%
|
|
(6)%
|
Renewal
|
(1)%
|
|
1%
|
|
(1)%
|
|
1%
|
|
Growth Over Prior Year
|
||||||
|
Quarter
|
|
Year-to-date
|
||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
WRITTEN PREMIUM PER POLICY
|
|
|
|
|
|
|
|
Personal Lines—auto
|
3%
|
|
6%
|
|
2%
|
|
6%
|
Commercial Lines
|
4%
|
|
6%
|
|
4%
|
|
8%
|
|
Growth Over Prior Year
|
||
|
2014
|
|
2013
|
RETENTION MEASURES
|
|
|
|
Personal Lines - auto
|
|
|
|
Policy life expectancy
|
|
|
|
Trailing 3-months
|
3%
|
|
(9)%
|
Trailing 12-months
|
3%
|
|
(6)%
|
Renewal ratio
|
0.2%
|
|
(0.3)%
|
Commercial Lines - policy life expectancy (trailing 12-months)
|
(4)%
|
|
0%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
Underwriting
Profit (Loss)
|
|
Underwriting
Profit (Loss)
|
|
Underwriting
Profit (Loss)
|
|
Underwriting
Profit (Loss)
|
||||||||||||||||||||
($ in millions)
|
$
|
|
Margin
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
|
$
|
|
Margin
|
||||||||||||
Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
$
|
142.9
|
|
|
6.4
|
%
|
|
$
|
131.5
|
|
|
6.1
|
%
|
|
$
|
321.5
|
|
|
7.2
|
%
|
|
$
|
306.4
|
|
|
7.2
|
%
|
Direct
|
115.7
|
|
|
6.3
|
|
|
126.0
|
|
|
7.5
|
|
|
186.7
|
|
|
5.2
|
|
|
253.2
|
|
|
7.6
|
|
||||
Total Personal Lines
|
258.6
|
|
|
6.4
|
|
|
257.5
|
|
|
6.7
|
|
|
508.2
|
|
|
6.3
|
|
|
559.6
|
|
|
7.4
|
|
||||
Commercial Lines
|
78.4
|
|
|
17.5
|
|
|
32.1
|
|
|
7.3
|
|
|
119.3
|
|
|
13.5
|
|
|
47.4
|
|
|
5.4
|
|
||||
Other indemnity
1
|
(4.7
|
)
|
|
NM
|
|
|
(3.8
|
)
|
|
NM
|
|
|
(5.4
|
)
|
|
NM
|
|
|
(3.5
|
)
|
|
NM
|
|
||||
Total underwriting operations
|
$
|
332.3
|
|
|
7.4
|
%
|
|
$
|
285.8
|
|
|
6.7
|
%
|
|
$
|
622.1
|
|
|
7.0
|
%
|
|
$
|
603.5
|
|
|
7.1
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||
Underwriting Performance
1
|
2014
|
|
|
2013
|
|
|
Change
|
|
|
2014
|
|
|
2013
|
|
|
Change
|
|
Personal Lines—Agency
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
73.6
|
|
|
73.6
|
|
|
0 pts.
|
|
|
73.0
|
|
|
72.5
|
|
|
.5 pts.
|
|
Underwriting expense ratio
|
20.0
|
|
|
20.3
|
|
|
(.3) pts.
|
|
|
19.8
|
|
|
20.3
|
|
|
(.5) pts.
|
|
Combined ratio
|
93.6
|
|
|
93.9
|
|
|
(.3) pts.
|
|
|
92.8
|
|
|
92.8
|
|
|
0 pts.
|
|
Personal Lines—Direct
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
73.7
|
|
|
72.2
|
|
|
1.5 pts.
|
|
|
74.0
|
|
|
71.6
|
|
|
2.4 pts.
|
|
Underwriting expense ratio
|
20.0
|
|
|
20.3
|
|
|
(.3) pts.
|
|
|
20.8
|
|
|
20.8
|
|
|
0 pts.
|
|
Combined ratio
|
93.7
|
|
|
92.5
|
|
|
1.2 pts.
|
|
|
94.8
|
|
|
92.4
|
|
|
2.4 pts.
|
|
Total Personal Lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
73.6
|
|
|
73.0
|
|
|
.6 pts.
|
|
|
73.4
|
|
|
72.1
|
|
|
1.3 pts.
|
|
Underwriting expense ratio
|
20.0
|
|
|
20.3
|
|
|
(.3) pts.
|
|
|
20.3
|
|
|
20.5
|
|
|
(.2) pts.
|
|
Combined ratio
|
93.6
|
|
|
93.3
|
|
|
.3 pts.
|
|
|
93.7
|
|
|
92.6
|
|
|
1.1 pts.
|
|
Commercial Lines
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
60.3
|
|
|
71.0
|
|
|
(10.7) pts.
|
|
|
64.7
|
|
|
72.4
|
|
|
(7.7) pts.
|
|
Underwriting expense ratio
|
22.2
|
|
|
21.7
|
|
|
.5 pts.
|
|
|
21.8
|
|
|
22.2
|
|
|
(.4) pts.
|
|
Combined ratio
|
82.5
|
|
|
92.7
|
|
|
(10.2) pts.
|
|
|
86.5
|
|
|
94.6
|
|
|
(8.1) pts.
|
|
Total Underwriting Operations
2
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss & loss adjustment expense ratio
|
72.4
|
|
|
72.9
|
|
|
(.5) pts.
|
|
|
72.6
|
|
|
72.2
|
|
|
.4 pts.
|
|
Underwriting expense ratio
|
20.2
|
|
|
20.4
|
|
|
(.2) pts.
|
|
|
20.4
|
|
|
20.7
|
|
|
(.3) pts.
|
|
Combined ratio
|
92.6
|
|
|
93.3
|
|
|
(.7) pts.
|
|
|
93.0
|
|
|
92.9
|
|
|
.1 pts.
|
|
Accident year loss & loss adjustment expense ratio
3
|
72.6
|
|
|
72.5
|
|
|
.1 pts.
|
|
|
72.0
|
|
|
71.2
|
|
|
.8 pts.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(millions)
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||
Change in net loss and LAE reserves
|
$
|
25.5
|
|
|
$
|
125.8
|
|
|
$
|
107.3
|
|
|
$
|
182.8
|
|
Paid losses and LAE
|
3,243.6
|
|
|
2,991.2
|
|
|
6,367.7
|
|
|
5,919.7
|
|
||||
Total incurred losses and LAE
|
$
|
3,269.1
|
|
|
$
|
3,117.0
|
|
|
$
|
6,475.0
|
|
|
$
|
6,102.5
|
|
•
|
Bodily injury increased about 3%-4% for both the second quarter and first six months of 2014.
|
•
|
Property coverages increased with property damage up about 4%-6% and collision up about 2%-3% for both periods.
|
•
|
Personal injury protection (PIP) increased about 7% for the second quarter and increased about 2% year to date. The quarter-over-prior-year quarter reflects increases in severity trends in both Florida and New York, which experienced decreases in severity in the second quarter last year.
|
•
|
Bodily injury decreased about 1%-2% for both periods.
|
•
|
Property coverages saw the largest increases, on a year-to-date basis, with collision up about 6% and property damage up about 3%, primarily due to weather-related claims from the first quarter 2014 in the midwestern and northeastern states. For the second quarter, collision and property damage were relatively flat.
|
•
|
PIP was relatively flat for both periods.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
($ in millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Catastrophe losses incurred
|
$
|
129.8
|
|
|
$
|
83.4
|
|
|
$
|
139.0
|
|
|
$
|
129.6
|
|
Increase to combined ratio
|
2.9 pts.
|
|
|
1.9 pts.
|
|
|
1.6
|
pts.
|
|
1.5
|
pts.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(millions)
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
ACTUARIAL ADJUSTMENTS
|
|
|
|
|
|
|
|
||||||||
Reserve decrease/(increase)
|
|
|
|
|
|
|
|
||||||||
Prior accident years
|
$
|
31.4
|
|
|
$
|
16.4
|
|
|
$
|
50.8
|
|
|
$
|
29.0
|
|
Current accident year
|
(10.9
|
)
|
|
(4.7
|
)
|
|
(24.8
|
)
|
|
(4.2
|
)
|
||||
Calendar year actuarial adjustment
|
$
|
20.5
|
|
|
$
|
11.7
|
|
|
$
|
26.0
|
|
|
$
|
24.8
|
|
PRIOR ACCIDENT YEARS DEVELOPMENT
|
|
|
|
|
|
|
|
||||||||
Favorable/(Unfavorable)
|
|
|
|
|
|
|
|
||||||||
Actuarial adjustment
|
$
|
31.4
|
|
|
$
|
16.4
|
|
|
$
|
50.8
|
|
|
$
|
29.0
|
|
All other development
|
(23.9
|
)
|
|
(33.2
|
)
|
|
(106.2
|
)
|
|
(111.0
|
)
|
||||
Total development
|
$
|
7.5
|
|
|
$
|
(16.8
|
)
|
|
$
|
(55.4
|
)
|
|
$
|
(82.0
|
)
|
(Increase) decrease to calendar year combined ratio
|
.2 pts.
|
|
|
(.4) pts.
|
|
|
(.6
|
) pts.
|
|
(1.0
|
) pts.
|
•
|
Approximately 95% of the unfavorable prior year reserve development was attributable to accident year 2013, with the remaining five percent attributable to accident years 2012 and prior.
|
•
|
The unfavorable reserve development was in our Personal Lines business with our Agency business accounting for almost 70% and the Direct business accounting for about 30%. Slight favorable reserve development in our Commercial Lines business was almost entirely offset by unfavorable development in our run-off products.
|
•
|
In our personal auto business, we incurred unfavorable loss development primarily in our PIP coverage. In addition, we had unfavorable loss adjustment expense reserve development primarily affecting the 2013 accident year.
|
•
|
The unfavorable prior year reserve development was primarily attributable to accident year 2012 and, to a lesser extent, accident year 2011. The aggregate reserve development for accident years 2010 and prior was minimal.
|
•
|
Approximately two-thirds of our unfavorable reserve development was in our Personal Lines Agency business, with the remainder primarily in our Commercial Lines business.
|
•
|
The Personal Lines development reflected unfavorable reserve development in our personal auto business in our IBNR reserves due to higher frequency and severity on late emerging claims, primarily in our bodily injury and property damage coverages, as primarily reflected in the "all other development." Lower than anticipated severity costs on our case reserves partially offset the unfavorable IBNR development.
|
•
|
In our Commercial Lines business, we experienced unfavorable development due to higher frequency and severity on late emerging claims primarily in our bodily injury coverage for our truck business.
|
|
Growth over prior year
|
||||
|
Quarter
|
|
Year-to-date
|
||
Net premiums written
|
6
|
%
|
|
6
|
%
|
Net premiums earned
|
6
|
%
|
|
6
|
%
|
Policies in force
|
|
|
3
|
%
|
|
Growth over prior year
|
||||
|
Quarter
|
|
Year-to-date
|
||
Net premiums written
|
3
|
%
|
|
4
|
%
|
Net premiums earned
|
4
|
%
|
|
4
|
%
|
Auto: policies in force
|
|
|
0
|
%
|
|
new applications
|
(9
|
)%
|
|
(3
|
)%
|
renewal applications
|
2
|
%
|
|
2
|
%
|
written premium per policy
|
4
|
%
|
|
3
|
%
|
Retention measures:
|
|
|
|
||
policy life expectancy - trailing 3-months
|
1
|
%
|
|
|
|
trailing 12-months
|
1
|
%
|
|
|
|
renewal ratio
|
0.0
|
%
|
|
|
|
Growth over prior year
|
||||
|
Quarter
|
|
Year-to-date
|
||
Net premiums written
|
9
|
%
|
|
8
|
%
|
Net premiums earned
|
8
|
%
|
|
8
|
%
|
Auto: policies in force
|
|
|
7
|
%
|
|
new applications
|
4
|
%
|
|
9
|
%
|
renewal applications
|
7
|
%
|
|
6
|
%
|
written premium per policy
|
2
|
%
|
|
1
|
%
|
Retention measures:
|
|
|
|
||
policy life expectancy - trailing 3-months
|
7
|
%
|
|
|
|
trailing 12-months
|
6
|
%
|
|
|
|
renewal ratio
|
0.3
|
%
|
|
|
|
Growth over prior year
|
||||
|
Quarter
|
|
Year-to-date
|
||
Net premiums written
|
5
|
%
|
|
3
|
%
|
Net premiums earned
|
2
|
%
|
|
2
|
%
|
Policies in force
|
|
|
(2
|
)%
|
|
New applications
|
(1
|
)%
|
|
(5
|
)%
|
Renewal applications
|
(1
|
)%
|
|
(1
|
)%
|
Written premium per policy
|
4
|
%
|
|
4
|
%
|
Policy life expectancy (trailing 12-months)
|
(4
|
)%
|
|
|
•
|
Business auto
– autos, vans, and pick-up trucks used by small businesses, such as retailing, farming, services, and private trucking
|
•
|
For-hire transportation
– tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses and non-fleet long-haul operators
|
•
|
Contractor
– vans, pick-up trucks, and dump trucks used by small businesses, such as artisans, heavy construction, and landscapers/snowplowers
|
•
|
For-hire specialty
– dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, and coal-type businesses, and
|
•
|
Tow
– tow trucks and wreckers used in towing services and gas/service station businesses.
|
•
|
Commercial Auto Insurance Procedures/Plans (CAIP)
– We are the only servicing carrier on a nationwide basis for CAIP, which are state-supervised plans servicing the involuntary market. As a service provider, we provide policy issuance and claims adjusting services and collect fee revenue that is earned on a pro rata basis over the terms of the related policies.
|
•
|
Commission-Based Businesses
– We have two commission-based service businesses.
|
($ in millions)
|
Fair
Value
|
|
|
% of
Total
Portfolio
|
|
|
Duration
(years)
|
|
|
Rating
1
|
|
June 30, 2014
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
12,498.6
|
|
|
66.6
|
%
|
|
1.9
|
|
|
AA-
|
Nonredeemable preferred stocks
|
760.2
|
|
|
4.1
|
|
|
2.7
|
|
|
BB+
|
|
Short-term investments – other
|
3,118.7
|
|
|
16.6
|
|
|
<.1
|
|
|
AA+
|
|
Total fixed-income securities
|
16,377.5
|
|
|
87.3
|
|
|
1.6
|
|
|
AA-
|
|
Common equities
|
2,381.7
|
|
|
12.7
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
18,759.2
|
|
|
100.0
|
%
|
|
1.6
|
|
|
AA-
|
June 30, 2013
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
12,949.4
|
|
|
74.1
|
%
|
|
2.1
|
|
|
AA-
|
Nonredeemable preferred stocks
|
754.4
|
|
|
4.3
|
|
|
1.2
|
|
|
BB+
|
|
Short-term investments – other
|
1,558.1
|
|
|
8.9
|
|
|
<.1
|
|
|
AAA-
|
|
Total fixed-income securities
|
15,261.9
|
|
|
87.3
|
|
|
1.9
|
|
|
AA-
|
|
Common equities
|
2,224.5
|
|
|
12.7
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
17,486.4
|
|
|
100.0
|
%
|
|
1.9
|
|
|
AA-
|
December 31, 2013
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
$
|
13,540.4
|
|
|
75.0
|
%
|
|
2.1
|
|
|
AA-
|
Nonredeemable preferred stocks
|
711.2
|
|
|
3.9
|
|
|
1.3
|
|
|
BB+
|
|
Short-term investments – other
|
1,272.6
|
|
|
7.1
|
|
|
<.1
|
|
|
AA+
|
|
Total fixed-income securities
|
15,524.2
|
|
|
86.0
|
|
|
2.0
|
|
|
AA-
|
|
Common equities
|
2,530.5
|
|
|
14.0
|
|
|
na
|
|
|
na
|
|
Total portfolio
2,3
|
$
|
18,054.7
|
|
|
100.0
|
%
|
|
2.0
|
|
|
AA-
|
na = not applicable
|
|
|
|
|
|
|
|
($ in millions)
|
Fair
Value
|
|
|
% of
Total
Portfolio
|
|
|
June 30, 2014
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
551.6
|
|
|
2.9
|
%
|
Redeemable preferred stocks
1,2
|
183.1
|
|
|
1.0
|
|
|
Nonredeemable preferred stocks
|
760.2
|
|
|
4.1
|
|
|
Common equities
|
2,381.7
|
|
|
12.7
|
|
|
Total Group I securities
|
3,876.6
|
|
|
20.7
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
11,763.9
|
|
|
62.7
|
|
|
Short-term investments – other
|
3,118.7
|
|
|
16.6
|
|
|
Total Group II securities
|
14,882.6
|
|
|
79.3
|
|
|
Total portfolio
|
$
|
18,759.2
|
|
|
100.0
|
%
|
June 30, 2013
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
559.2
|
|
|
3.2
|
%
|
Redeemable preferred stocks
1,2
|
266.2
|
|
|
1.5
|
|
|
Nonredeemable preferred stocks
|
754.4
|
|
|
4.3
|
|
|
Common equities
|
2,224.5
|
|
|
12.7
|
|
|
Total Group I securities
|
3,804.3
|
|
|
21.7
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
12,124.0
|
|
|
69.4
|
|
|
Short-term investments – other
|
1,558.1
|
|
|
8.9
|
|
|
Total Group II securities
|
13,682.1
|
|
|
78.3
|
|
|
Total portfolio
|
$
|
17,486.4
|
|
|
100.0
|
%
|
December 31, 2013
|
|
|
|
|||
Group I securities:
|
|
|
|
|||
Non-investment-grade fixed maturities
|
$
|
592.1
|
|
|
3.3
|
%
|
Redeemable preferred stocks
1,2
|
210.1
|
|
|
1.2
|
|
|
Nonredeemable preferred stocks
|
711.2
|
|
|
3.9
|
|
|
Common equities
|
2,530.5
|
|
|
14.0
|
|
|
Total Group I securities
|
4,043.9
|
|
|
22.4
|
|
|
Group II securities:
|
|
|
|
|||
Other fixed maturities
2
|
12,738.2
|
|
|
70.5
|
|
|
Short-term investments – other
|
1,272.6
|
|
|
7.1
|
|
|
Total Group II securities
|
14,010.8
|
|
|
77.6
|
|
|
Total portfolio
|
$
|
18,054.7
|
|
|
100.0
|
%
|
|
June 30, 2014
|
|
June 30, 2013
|
|
December 31, 2013
|
|||||||||||||||
($ in millions)
|
Fair
Value
|
|
|
% of
Total
|
|
|
Fair
Value
|
|
|
% of
Total
|
|
|
Fair
Value
|
|
|
% of
Total
|
|
|||
Investment-grade fixed maturities:
1
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short/intermediate term
|
$
|
14,344.0
|
|
|
91.8
|
%
|
|
$
|
13,298.3
|
|
|
91.7
|
%
|
|
$
|
13,571.5
|
|
|
91.6
|
%
|
Long term
|
66.2
|
|
|
.4
|
|
|
61.0
|
|
|
.4
|
|
|
58.2
|
|
|
.4
|
|
|||
Non-investment-grade fixed maturities:
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Short/intermediate term
|
1,179.7
|
|
|
7.6
|
|
|
1,111.6
|
|
|
7.7
|
|
|
1,132.5
|
|
|
7.7
|
|
|||
Long term
|
27.4
|
|
|
.2
|
|
|
36.6
|
|
|
.2
|
|
|
50.8
|
|
|
.3
|
|
|||
Total
|
$
|
15,617.3
|
|
|
100.0
|
%
|
|
$
|
14,507.5
|
|
|
100.0
|
%
|
|
$
|
14,813.0
|
|
|
100.0
|
%
|
Duration Distribution
|
June 30, 2014
|
|
|
June 30, 2013
|
|
|
December 31, 2013
|
|
1 year
|
28.2
|
%
|
|
23.0
|
%
|
|
26.9
|
%
|
2 years
|
26.2
|
|
|
20.1
|
|
|
24.9
|
|
3 years
|
18.6
|
|
|
30.6
|
|
|
23.4
|
|
5 years
|
21.9
|
|
|
24.1
|
|
|
22.2
|
|
10 years
|
5.1
|
|
|
2.2
|
|
|
2.6
|
|
Total fixed-income portfolio
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Rating
|
June 30, 2014
|
|
|
June 30, 2013
|
|
|
December 31, 2013
|
|
AAA
|
52.4
|
%
|
|
52.4
|
%
|
|
50.8
|
%
|
AA
|
12.9
|
|
|
11.7
|
|
|
12.7
|
|
A
|
8.8
|
|
|
6.2
|
|
|
8.2
|
|
BBB
|
15.8
|
|
|
19.8
|
|
|
18.2
|
|
Non-investment grade/non-rated
1
|
10.1
|
|
|
9.9
|
|
|
10.1
|
|
Total fixed-income portfolio
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
($ in millions)
|
Fair
Value
|
|
|
Duration
(years)
|
|
|
U.S. Treasury Notes
|
|
|
|
|||
Less than two years
|
$
|
1,848.3
|
|
|
1.4
|
|
Two to five years
|
997.5
|
|
|
2.6
|
|
|
Five to ten years
|
408.5
|
|
|
7.6
|
|
|
Total U.S. Treasury Notes
|
3,254.3
|
|
|
2.6
|
|
|
Interest Rate Swaps
|
|
|
|
|||
Five to ten years ($750 notional value)
|
35.1
|
|
|
(8.3
|
)
|
|
Total interest rate swaps ($750 notional value)
|
35.1
|
|
|
(8.3
|
)
|
|
Total U.S. government obligations
|
$
|
3,289.4
|
|
|
.6
|
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
June 30, 2014
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
428.9
|
|
|
$
|
5.1
|
|
|
9.9
|
%
|
|
.9
|
|
|
A-
|
Alt-A collateralized mortgage obligations
|
183.3
|
|
|
3.3
|
|
|
4.2
|
|
|
1.2
|
|
|
BBB+
|
||
Collateralized mortgage obligations
|
612.2
|
|
|
8.4
|
|
|
14.1
|
|
|
1.0
|
|
|
BBB+
|
||
Home equity (sub-prime bonds)
|
723.2
|
|
|
15.0
|
|
|
16.7
|
|
|
<.1
|
|
|
BBB-
|
||
Residential mortgage-backed securities
|
1,335.4
|
|
|
23.4
|
|
|
30.8
|
|
|
.4
|
|
|
BBB
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
1,850.7
|
|
|
37.4
|
|
|
42.8
|
|
|
2.8
|
|
|
AA
|
||
Commercial mortgage-backed securities: interest only
|
168.6
|
|
|
7.5
|
|
|
3.9
|
|
|
2.8
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,019.3
|
|
|
44.9
|
|
|
46.7
|
|
|
2.8
|
|
|
AA
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
381.3
|
|
|
2.5
|
|
|
8.8
|
|
|
1.2
|
|
|
AAA
|
||
Credit card
|
129.3
|
|
|
1.3
|
|
|
3.0
|
|
|
1.2
|
|
|
AAA
|
||
Other
1
|
462.4
|
|
|
3.2
|
|
|
10.7
|
|
|
1.3
|
|
|
AA+
|
||
Other asset-backed securities
|
973.0
|
|
|
7.0
|
|
|
22.5
|
|
|
1.2
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
4,327.7
|
|
|
$
|
75.3
|
|
|
100.0
|
%
|
|
1.7
|
|
|
AA-
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
June 30, 2013
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
260.4
|
|
|
$
|
3.7
|
|
|
6.4
|
%
|
|
.9
|
|
|
A-
|
Alt-A collateralized mortgage obligations
|
68.3
|
|
|
2.5
|
|
|
1.7
|
|
|
1.1
|
|
|
A-
|
||
Collateralized mortgage obligations
|
328.7
|
|
|
6.2
|
|
|
8.1
|
|
|
.9
|
|
|
A-
|
||
Home equity (sub-prime bonds)
|
558.0
|
|
|
9.6
|
|
|
13.8
|
|
|
<.1
|
|
|
BBB-
|
||
Residential mortgage-backed securities
|
886.7
|
|
|
15.8
|
|
|
21.9
|
|
|
.2
|
|
|
BBB
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,056.7
|
|
|
.3
|
|
|
50.7
|
|
|
3.2
|
|
|
AA+
|
||
Commercial mortgage-backed securities: interest only
|
165.1
|
|
|
7.6
|
|
|
4.1
|
|
|
2.3
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,221.8
|
|
|
7.9
|
|
|
54.8
|
|
|
3.1
|
|
|
AA+
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
426.8
|
|
|
2.8
|
|
|
10.5
|
|
|
.9
|
|
|
AAA
|
||
Credit card
|
49.2
|
|
|
2.1
|
|
|
1.2
|
|
|
2.0
|
|
|
AAA
|
||
Other
1
|
471.7
|
|
|
.5
|
|
|
11.6
|
|
|
1.1
|
|
|
AA+
|
||
Other asset-backed securities
|
947.7
|
|
|
5.4
|
|
|
23.3
|
|
|
1.1
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
4,056.2
|
|
|
$
|
29.1
|
|
|
100.0
|
%
|
|
2.0
|
|
|
AA
|
($ in millions)
|
Fair
Value
|
|
|
Net Unrealized
Gains (Losses)
|
|
|
% of Asset-
Backed
Securities
|
|
|
Duration
(years)
|
|
|
Rating
(at period end)
|
||
December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Prime collateralized mortgage obligations
|
$
|
294.6
|
|
|
$
|
4.4
|
|
|
6.7
|
%
|
|
.8
|
|
|
A-
|
Alt-A collateralized mortgage obligations
|
143.8
|
|
|
3.4
|
|
|
3.3
|
|
|
1.1
|
|
|
A-
|
||
Collateralized mortgage obligations
|
438.4
|
|
|
7.8
|
|
|
10.0
|
|
|
.9
|
|
|
A-
|
||
Home equity (sub-prime bonds)
|
689.5
|
|
|
10.0
|
|
|
15.8
|
|
|
<.1
|
|
|
BBB-
|
||
Residential mortgage-backed securities
|
1,127.9
|
|
|
17.8
|
|
|
25.8
|
|
|
.2
|
|
|
BBB
|
||
Commercial mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Commercial mortgage-backed securities
|
2,038.6
|
|
|
(.1
|
)
|
|
46.7
|
|
|
3.2
|
|
|
AA
|
||
Commercial mortgage-backed securities: interest only
|
121.9
|
|
|
6.2
|
|
|
2.8
|
|
|
2.4
|
|
|
AAA-
|
||
Commercial mortgage-backed securities
|
2,160.5
|
|
|
6.1
|
|
|
49.5
|
|
|
3.1
|
|
|
AA+
|
||
Other asset-backed securities:
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
494.1
|
|
|
2.9
|
|
|
11.3
|
|
|
1.2
|
|
|
AAA
|
||
Credit card
|
59.7
|
|
|
1.7
|
|
|
1.4
|
|
|
1.7
|
|
|
AAA
|
||
Other
1
|
523.9
|
|
|
(.1
|
)
|
|
12.0
|
|
|
1.2
|
|
|
AAA-
|
||
Other asset-backed securities
|
1,077.7
|
|
|
4.5
|
|
|
24.7
|
|
|
1.2
|
|
|
AAA-
|
||
Total asset-backed securities
|
$
|
4,366.1
|
|
|
$
|
28.4
|
|
|
100.0
|
%
|
|
1.9
|
|
|
AA-
|
Collateralized Mortgage Obligations (at June 30, 2014)
|
||||||||||||||||||
($ in millions)
Rating 1 |
Non-Agency Prime
|
|
Alt-A
|
|
Government/GSE
2
|
|
|
Total
|
|
% of Total
|
|
|||||||
AAA
|
$
|
49.3
|
|
|
$
|
0
|
|
|
$
|
6.4
|
|
|
$
|
55.7
|
|
|
9.1
|
%
|
AA
|
15.2
|
|
|
18.5
|
|
|
1.7
|
|
|
35.4
|
|
|
5.8
|
|
||||
A
|
202.2
|
|
|
111.7
|
|
|
0
|
|
|
313.9
|
|
|
51.3
|
|
||||
BBB
|
57.9
|
|
|
2.1
|
|
|
0
|
|
|
60.0
|
|
|
9.8
|
|
||||
Non-investment grade
|
96.2
|
|
|
51.0
|
|
|
0
|
|
|
147.2
|
|
|
24.0
|
|
||||
Total
|
$
|
420.8
|
|
|
$
|
183.3
|
|
|
$
|
8.1
|
|
|
$
|
612.2
|
|
|
100.0
|
%
|
Increase (decrease) in value
|
1.0
|
%
|
|
1.8
|
%
|
|
13.4
|
%
|
|
1.4
|
%
|
|
|
Home Equity Securities (at June 30, 2014)
|
||||||
($ in millions)
Rating
1
|
Total
|
|
% of Total
|
|
||
AAA
|
$
|
31.0
|
|
|
4.3
|
%
|
AA
|
6.0
|
|
|
.8
|
|
|
A
|
132.3
|
|
|
18.3
|
|
|
BBB
|
150.1
|
|
|
20.8
|
|
|
Non-investment grade
|
403.8
|
|
|
55.8
|
|
|
Total
|
$
|
723.2
|
|
|
100.0
|
%
|
Increase (decrease) in value
|
2.1
|
%
|
|
|
Commercial Mortgage-Backed Securities (at June 30, 2014)
1
|
||||||||||||||||||||||||||
($ in millions)
Category
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Non-Investment
Grade
|
|
|
Total
|
|
% of Total
|
|
|||||||||||
CMBS bonds
|
$
|
1,021.4
|
|
|
$
|
402.6
|
|
|
$
|
222.4
|
|
|
$
|
176.7
|
|
|
$
|
27.6
|
|
|
$
|
1,850.7
|
|
|
91.7
|
%
|
IO
|
163.2
|
|
|
0
|
|
|
0
|
|
|
.3
|
|
|
5.1
|
|
|
168.6
|
|
|
8.3
|
|
||||||
Total fair value
|
$
|
1,184.6
|
|
|
$
|
402.6
|
|
|
$
|
222.4
|
|
|
$
|
177.0
|
|
|
$
|
32.7
|
|
|
$
|
2,019.3
|
|
|
100.0
|
%
|
% of Total fair value
|
58.7
|
%
|
|
19.9
|
%
|
|
11.0
|
%
|
|
8.8
|
%
|
|
1.6
|
%
|
|
100.0
|
%
|
|
|
CMBS Bond Portfolio (at June 30, 2014)
|
|||||||||||
(millions)
Vintage
|
Multi-Borrower
|
|
|
Single-Borrower
|
|
|
Total
|
|
|||
1997-2005
|
$
|
303.5
|
|
|
$
|
2.3
|
|
|
$
|
305.8
|
|
2006-2008
|
26.1
|
|
|
12.3
|
|
|
38.4
|
|
|||
2009-2014
|
431.0
|
|
|
1,075.5
|
|
|
1,506.5
|
|
|||
Total
|
$
|
760.6
|
|
|
$
|
1,090.1
|
|
|
$
|
1,850.7
|
|
Municipal Securities (at June 30, 2014)
|
|||||||||||
(millions)
Rating
|
General
Obligations
|
|
|
Revenue
Bonds
|
|
|
Total
|
|
|||
AAA
|
$
|
362.9
|
|
|
$
|
538.5
|
|
|
$
|
901.4
|
|
AA
|
329.2
|
|
|
702.0
|
|
|
1,031.2
|
|
|||
A
|
0
|
|
|
387.1
|
|
|
387.1
|
|
|||
BBB
|
0
|
|
|
11.0
|
|
|
11.0
|
|
|||
Non-investment grade/non-rated
|
0
|
|
|
.5
|
|
|
.5
|
|
|||
Total
|
$
|
692.1
|
|
|
$
|
1,639.1
|
|
|
$
|
2,331.2
|
|
Corporate Securities (at June 30, 2014)
|
||||||||||||||
Sector
|
AA
|
|
|
A
|
|
|
BBB
|
|
|
Non-Investment
Grade/Non-Rated
|
|
|
% of
Corporate
Securities
|
|
Consumer
|
0
|
%
|
|
0
|
%
|
|
16.5
|
%
|
|
10.9
|
%
|
|
27.4
|
%
|
Industrial
|
0
|
|
|
2.8
|
|
|
22.3
|
|
|
6.6
|
|
|
31.7
|
|
Communications
|
0
|
|
|
1.8
|
|
|
11.9
|
|
|
1.8
|
|
|
15.5
|
|
Financial Services
|
1.3
|
|
|
3.0
|
|
|
13.1
|
|
|
4.7
|
|
|
22.1
|
|
Technology
|
0
|
|
|
0
|
|
|
.9
|
|
|
0
|
|
|
.9
|
|
Basic Materials
|
0
|
|
|
0
|
|
|
1.6
|
|
|
0
|
|
|
1.6
|
|
Energy
|
0
|
|
|
0
|
|
|
.8
|
|
|
0
|
|
|
.8
|
|
Total
|
1.3
|
%
|
|
7.6
|
%
|
|
67.1
|
%
|
|
24.0
|
%
|
|
100.0
|
%
|
Preferred Stocks (at June 30, 2014)
|
||||||||
Sector
|
BBB
|
|
|
Non-Investment
Grade/Non-Rated
|
|
|
% of Preferred
Stock Portfolio
|
|
Financial Services
|
|
|
|
|
|
|||
U.S. banks
|
31.4
|
%
|
|
25.9
|
%
|
|
57.3
|
%
|
Foreign banks
|
0
|
|
|
2.1
|
|
|
2.1
|
|
Insurance holdings
|
4.7
|
|
|
13.7
|
|
|
18.4
|
|
Other financial institutions
|
.6
|
|
|
4.0
|
|
|
4.6
|
|
Total financial services
|
36.7
|
|
|
45.7
|
|
|
82.4
|
|
Industrials
|
7.4
|
|
|
4.0
|
|
|
11.4
|
|
Utilities
|
6.2
|
|
|
0
|
|
|
6.2
|
|
Total
|
50.3
|
%
|
|
49.7
|
%
|
|
100.0
|
%
|
($ in millions)
|
June 30, 2014
|
|
June 30, 2013
|
|
December 31, 2013
|
|||||||||||||||
Common stocks
|
$
|
2,381.2
|
|
|
99.9
|
%
|
|
$
|
2,185.8
|
|
|
98.3
|
%
|
|
$
|
2,530.0
|
|
|
99.9
|
%
|
Other risk investments
|
.5
|
|
|
.1
|
|
|
38.7
|
|
|
1.7
|
|
|
.5
|
|
|
.1
|
|
|||
Total common equities
|
$
|
2,381.7
|
|
|
100.0
|
%
|
|
$
|
2,224.5
|
|
|
100.0
|
%
|
|
$
|
2,530.5
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Realized Gains (Losses)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Notional Value
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||
(millions)
|
|
Date
|
|
|
|
June 30,
|
|
|
||||||||||||||||||||||
Term
|
|
Effective
|
|
Maturity
|
|
Coupon
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
||||||
10-year
|
|
04/2013
|
|
04/2023
|
|
Receive variable
|
|
$
|
150
|
|
|
$
|
150
|
|
|
$
|
(4.0
|
)
|
|
$
|
10.0
|
|
|
$
|
(7.9
|
)
|
|
$
|
10.0
|
|
10-year
|
|
04/2013
|
|
04/2023
|
|
Receive variable
|
|
185
|
|
|
185
|
|
|
(4.9
|
)
|
|
12.4
|
|
|
(9.6
|
)
|
|
12.4
|
|
||||||
10-year
|
|
04/2013
|
|
04/2023
|
|
Receive variable
|
|
415
|
|
|
415
|
|
|
(11.0
|
)
|
|
27.8
|
|
|
(21.7
|
)
|
|
27.8
|
|
||||||
Total open positions
|
|
|
|
$
|
750
|
|
|
$
|
750
|
|
|
$
|
(19.9
|
)
|
|
$
|
50.2
|
|
|
$
|
(39.2
|
)
|
|
$
|
50.2
|
|
||||
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
5-year
|
|
NA
|
|
NA
|
|
Receive variable
|
|
$
|
0
|
|
|
$
|
400
|
|
|
$
|
0
|
|
|
$
|
(1.1
|
)
|
|
$
|
0
|
|
|
$
|
(1.0
|
)
|
5-year
|
|
NA
|
|
NA
|
|
Receive variable
|
|
0
|
|
|
500
|
|
|
0
|
|
|
(1.4
|
)
|
|
0
|
|
|
(1.6
|
)
|
||||||
9-year
|
|
NA
|
|
NA
|
|
Receive variable
|
|
0
|
|
|
363
|
|
|
0
|
|
|
(2.8
|
)
|
|
0
|
|
|
(1.4
|
)
|
||||||
Total closed positions
|
|
|
|
$
|
0
|
|
|
$
|
1,263
|
|
|
$
|
0
|
|
|
$
|
(5.3
|
)
|
|
$
|
0
|
|
|
$
|
(4.0
|
)
|
||||
Total interest rate swaps
|
|
|
|
$
|
750
|
|
|
$
|
2,013
|
|
|
$
|
(19.9
|
)
|
|
$
|
44.9
|
|
|
$
|
(39.2
|
)
|
|
$
|
46.2
|
|
||||
NA = Not Applicable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
Six Months
|
||||||||
|
2014
|
|
|
2013
|
|
|
2014
|
|
2013
|
||
Pretax recurring investment book yield
|
2.3
|
%
|
|
2.6
|
%
|
|
2.4
|
%
|
|
2.6
|
%
|
Weighted average FTE book yield
|
2.6
|
%
|
|
2.8
|
%
|
|
2.7
|
%
|
|
2.9
|
%
|
FTE total return:
|
|
|
|
|
|
|
|
||||
Fixed-income securities
|
1.1
|
%
|
|
(.5
|
)%
|
|
2.4
|
%
|
|
.4
|
%
|
Common stocks
|
4.9
|
%
|
|
2.9
|
%
|
|
7.2
|
%
|
|
13.8
|
%
|
Total portfolio
|
1.6
|
%
|
|
.1
|
%
|
|
3.0
|
%
|
|
2.2
|
%
|
|
Three Months
|
|
Six Months
|
||||||||
|
2014
|
|
|
2013
|
|
|
2014
|
|
2013
|
||
Fixed-income securities:
|
|
|
|
|
|
|
|
||||
U.S. Treasury Notes
|
.1
|
%
|
|
.7
|
%
|
|
0
|
%
|
|
1.0
|
%
|
Municipal bonds
|
1.9
|
%
|
|
(.6
|
)%
|
|
3.8
|
%
|
|
.4
|
%
|
Corporate bonds
|
1.5
|
%
|
|
(1.4
|
)%
|
|
3.0
|
%
|
|
(.6
|
)%
|
Commercial mortgage-backed securities
|
1.8
|
%
|
|
(2.0
|
)%
|
|
3.6
|
%
|
|
(1.5
|
)%
|
Collateralized mortgage obligations
|
.7
|
%
|
|
(.6
|
)%
|
|
1.8
|
%
|
|
1.3
|
%
|
Asset-backed securities
|
1.0
|
%
|
|
(.1
|
)%
|
|
1.8
|
%
|
|
1.1
|
%
|
Preferred stocks
|
3.7
|
%
|
|
.2
|
%
|
|
9.9
|
%
|
|
5.2
|
%
|
Common stock portfolios:
|
|
|
|
|
|
|
|
||||
Indexed
|
5.2
|
%
|
|
2.9
|
%
|
|
7.5
|
%
|
|
14.2
|
%
|
Actively managed
|
3.3
|
%
|
|
3.1
|
%
|
|
5.3
|
%
|
|
11.8
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
(millions)
|
Total
Write-downs
|
|
|
Write-downs
on Securities
Sold
|
|
|
Write-downs
on Securities
Held at
Period End
|
|
|
Total
Write-downs
|
|
|
Write-downs
on Securities
Sold
|
|
|
Write-downs
on Securities
Held at
Period End
|
|
||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage-backed securities
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Total fixed-income securities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Common equities
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total portfolio
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage-backed securities
|
$
|
.3
|
|
|
$
|
0
|
|
|
$
|
.3
|
|
|
$
|
.4
|
|
|
$
|
0
|
|
|
$
|
.4
|
|
Total fixed-income securities
|
.3
|
|
|
0
|
|
|
.3
|
|
|
.4
|
|
|
0
|
|
|
.4
|
|
||||||
Common equities
|
1.3
|
|
|
0
|
|
|
1.3
|
|
|
1.4
|
|
|
0
|
|
|
1.4
|
|
||||||
Total portfolio
|
$
|
1.6
|
|
|
$
|
0
|
|
|
$
|
1.6
|
|
|
$
|
1.8
|
|
|
$
|
0
|
|
|
$
|
1.8
|
|
|
|
|
|
Total Gross
Unrealized
Losses
|
|
|
Decline of Investment Value
|
||||||||||||||||
(millions)
|
Fair
Value
|
|
|
>15%
|
|
|
>25%
|
|
|
>35%
|
|
|
>45%
|
|
|||||||||
Fixed Income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss for less than 12 months
|
$
|
541.6
|
|
|
$
|
2.8
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Unrealized loss for 12 months or greater
|
1,720.7
|
|
|
25.4
|
|
|
1.2
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total
|
$
|
2,262.3
|
|
|
$
|
28.2
|
|
|
$
|
1.2
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Common Equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized loss for less than 12 months
|
$
|
50.4
|
|
|
$
|
2.4
|
|
|
$
|
.1
|
|
|
$
|
.1
|
|
|
$
|
.1
|
|
|
$
|
0
|
|
Unrealized loss for 12 months or greater
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
||||||
Total
|
$
|
50.4
|
|
|
$
|
2.4
|
|
|
$
|
.1
|
|
|
$
|
.1
|
|
|
$
|
.1
|
|
|
$
|
0
|
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||||
2014
Calendar
Month
|
Total
Number of
Shares
Purchased
|
|
|
Average
Price
Paid
Per Share
|
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
|
|
|
Maximum Number of
Shares That May Yet be
Purchased Under the
Plans or Programs
|
|
|
April
|
1,104,828
|
|
|
$
|
23.91
|
|
|
48,939,606
|
|
|
26,060,394
|
|
May
|
248,635
|
|
|
24.94
|
|
|
49,188,241
|
|
|
25,811,759
|
|
|
June
|
501,143
|
|
|
25.40
|
|
|
49,689,384
|
|
|
25,310,616
|
|
|
Total
|
1,854,606
|
|
|
$
|
24.45
|
|
|
|
|
|
|
|
|
THE PROGRESSIVE CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
Date: July 30, 2014
|
|
|
By:
/s/ Brian C. Domeck
|
|
|
|
Brian C. Domeck
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Vice President and Chief Financial Officer
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Exhibit No.
Under
Reg. S-K,
Item 601
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Form 10-Q
Exhibit
Number
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Description of Exhibit
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If Incorporated by Reference,
Documents with Which Exhibit was
Previously Filed with SEC
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31
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31.1
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Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer, Glenn M. Renwick
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Filed herewith
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31
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31.2
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Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer, Brian C. Domeck
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Filed herewith
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32
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32.1
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Section 1350 Certification of the Principal Executive Officer, Glenn M. Renwick
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Furnished herewith
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32
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32.2
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Section 1350 Certification of the Principal Financial Officer, Brian C. Domeck
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Furnished herewith
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99
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99
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Letter to Shareholders from Glenn M. Renwick, President and Chief Executive Officer (Regulation FD Disclosure)
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Furnished herewith
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101
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101.INS
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XBRL Instance Document
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Filed herewith
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101
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101.SCH
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XBRL Taxonomy Extension Schema Document
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Filed herewith
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101
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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Filed herewith
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101
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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Filed herewith
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101
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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Filed herewith
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101
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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Filed herewith
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No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Customer name | Ticker |
---|---|
American Axle & Manufacturing Holdings, Inc. | AXL |
Aon Plc | AON |
Marsh & McLennan Companies, Inc. | MMC |
Suppliers
Supplier name | Ticker |
---|---|
Tesla, Inc. | TSLA |
Toyota Motor Corporation | TM |
Canaan Inc. | CAN |
General Motors Company | GM |
PACCAR Inc | PCAR |
Honda Motor Co., Ltd. | HMC |
General Motors Company | GM |
PACCAR Inc | PCAR |
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|